Kit Addleman in Law360: 5 Tricky Questions Posed By SEC Rule On Employee Pacts

04/07/2015

Following the U.S. Securities and Exchange Commission’s first-ever enforcement action under its rule about confidentiality agreements, employers everywhere should make sure they aren’t accidentally using such agreements to stifle whistleblowers. Here, some of the country's top attorneys answer tricky questions about how to do just that.

Is it possible to “stifle” a whistleblower without meaning to? What’s the rule for that?

As far as the SEC is concerned, it is. The agency spelled out what’s allowed in Rule 21F-17, published in 2011 as part of the comprehensive whistleblower regime mandated by the Dodd-Frank Act…

And when it comes to fines over Rule 21F-17 violations, they’re only likely to get bigger, according to Kit Addleman, head of Haynes and Boone LLP’s SEC enforcement defense practice.

“The SEC usually starts out smaller in terms of penalties with a first-of-a-kind action like this,” said Addleman. “Once you know that the SEC is taking a look at it, you need to be diligent.”

Excerpted from Law360. To read the full article, click here (subscription required).


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