New provisions were set forth last year under Section 21F of the Securities Exchange Act of 1934 which could have an impact on your business. Employees no longer are required to report SEC violations to their employer before turning information in to the Commission. Work with a Woburn business attorney to make sure you are in full compliance with SEC rules.
The Bill
The Dodd-Frank Wall Street Reform and Consumer Protection Act, section 922 has the potential of significantly increasing the number of businesses that fall short of abiding by SEC regulations. The act covers a wide range of potential violations, most notable of which are those involving alleged discrimination in hiring, promoting, or terminating employees.
Not only does the employee now not need to file a complaint with the employer first; they are encouraged not to do so. The so-called “whistleblower” provision allows for awards to be paid to employees who report violations to the SEC. If your company becomes the subject of such a report, it is essential that you speak with a Woburn business attorney.
Potential Abuse of the Whistleblower Provision
Certainly, businesses need to abide by fair employment practices. However, Dodd-Frank encourages workers to turn in their employers by providing financial incentives. The potential gain is significant—between 10 and 30 percent of the sanctions the SEC collects from a company found to be non-compliant. This opens the door to the possibility that employees will now simply seek ways to profit from any alleged wrongdoing on the part of their employers, rather than try to remedy the situation internally.
If you are concerned about how the Dodd-Frank bill may affect your business, a Woburn attorney may be able to help. Call the Law Offices of David Ionson today at (781) 674-2562.
