Corporate Governance

Group Questions Implementation of Whistleblower Rule

By Fei-Lu Qian

A coalition group headed by Voices for Corporate Responsibility, the Government Accountability Project, Change to Win and the National Employment Lawyers Association submitted a letter to the SEC raising concerns that the agency?s proposed rules for whistleblowers under the Dodd-Frank Wall Street Reform and Consumer Projection Act will not take whistleblowers? tips seriously enough.  The group points out that the SEC has not established a process to work with whistleblowers and to best use the information provided by whistleblowers.

The group argues that the proposed rules give ?far too much deference to internal corporate compliance procedures to police wrongdoing.?  However, the group argues that deterrence is not warranted where, by definition, securities fraud and other illegal acts occur with the knowledge and consent of corporate officers and directors.  In such situations, the group contends that internal compliance programs will almost certainly fail to effect positive change.?

Full post as published by PomTalk on December 22, 2010 (boomark / email).