```

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3625 Referred in Senate (RFS)]

<DOC>
116th CONGRESS
  1st Session
                                H. R. 3625

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 23, 2019

Received; read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 AN ACT

 
 To establish a whistleblower program at the Public Company Accounting 
                Oversight Board, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``PCAOB Whistleblower Protection Act 
of 2019''.

SEC. 2. WHISTLEBLOWER INCENTIVES AND PROTECTION.

    The Sarbanes-Oxley Act of 2002 is amended--
            (1) in section 105 (15 U.S.C. 7215) by adding at the end 
        the following:
    ``(f) Whistleblower Incentives and Protection.--
            ``(1) Definitions.--In this subsection the following 
        definitions shall apply:
                    ``(A) Covered proceeding.--The term `covered 
                proceeding' means any disciplinary proceeding by the 
                Board initiated after the date of the enactment of this 
                subsection that results in monetary sanctions exceeding 
                $250,000.
                    ``(B) Original information.--The term `original 
                information' means information that--
                            ``(i) is derived from the independent 
                        knowledge or analysis of a whistleblower;
                            ``(ii) is not known to the Board from any 
                        other source, unless the whistleblower is the 
                        original source of the information; and
                            ``(iii) is not exclusively derived from an 
                        allegation made in a disciplinary proceeding, 
                        in a judicial or administrative hearing, in a 
                        governmental report, hearing, audit, or 
                        investigation, or from the news media, unless 
                        the whistleblower is a source of the 
                        information.
                    ``(C) Monetary sanctions.--The term `monetary 
                sanctions' means any civil money penalties imposed by 
                the Board under subsection (c)(4) as modified by the 
                Commission under section 107(c)(3).
                    ``(D) Whistleblower.--
                            ``(i) In general.--The term `whistleblower' 
                        means any individual who provides, or two or 
                        more individuals acting jointly who provide, 
                        information relating to a violation of this 
                        Act, the rules of the Board, the provisions of 
                        the securities laws relating to the preparation 
                        and issuance of audit reports and the 
                        obligations and liabilities of accountants with 
                        respect thereto, including the rules of the 
                        Board issued pursuant to this Act, or 
                        professional standards.
                            ``(ii) Special rule.--Solely for the 
                        purposes of paragraph (7), the term 
                        `whistleblower' shall also include any 
                        individual who takes an action described in 
                        paragraph 7(A), or two or more individuals 
                        acting jointly who take an action described in 
                        paragraph 7(A).
            ``(2) Awards.--
                    ``(A) In general.--In any covered disciplinary 
                proceeding, the Board shall pay an award or awards to 
                one or more whistleblowers who voluntarily provided 
                original information to the Board that resulted in the 
                board imposing monetary sanctions, in an aggregate 
                amount determined in the discretion of the Board but 
                equal to--
                            ``(i) not less than 10 percent, in total, 
                        of what has been collected of the monetary 
                        sanctions imposed; and
                            ``(ii) not more than 30 percent, in total, 
                        of what has been collected of the monetary 
                        sanctions.
                    ``(B) Payment of awards.--Any amount paid under 
                this subparagraph shall be paid from any funds 
                generated from the collection of monetary sanctions.
            ``(3) Determination of amount of award; denial of award.--
                    ``(A) Determination of amount of award.--
                            ``(i) Discretion.--The determination of the 
                        amount of an award made under paragraph (2) 
                        shall be in the discretion of the Board.
                            ``(ii) Criteria.--In determining the amount 
                        of an award made under subparagraph (A), the 
                        Board shall take into consideration--
                                    ``(I) the significance of the 
                                information provided by the 
                                whistleblower to the success of the 
                                disciplinary proceeding;
                                    ``(II) the degree of assistance 
                                provided by the whistleblower and any 
                                legal representative of the 
                                whistleblower in a disciplinary 
                                proceeding; and
                                    ``(III) the programmatic interest 
                                of the Board in deterring violations by 
                                making awards to whistleblowers who 
                                provide information that lead to 
                                successful enforcement.
                    ``(B) Denial of award.--No award under subparagraph 
                (A) shall be made--
                            ``(i) to any whistleblower who is, or was 
                        at the time the whistleblower acquired the 
                        original information submitted to the Board, a 
                        member, officer, or employee of--
                                    ``(I) an appropriate regulatory 
                                agency (as such term is defined in 
                                section 3 of the Securities Exchange 
                                Act of 1934);
                                    ``(II) the Department of Justice;
                                    ``(III) a self-regulatory 
                                organization (as such term is defined 
                                in section 34 of the Securities 
                                Exchange Act of 1934);
                                    ``(IV) the Public Company 
                                Accounting Oversight Board; or
                                    ``(V) a law enforcement 
                                organization;
                            ``(ii) to any whistleblower who is 
                        convicted of a criminal violation related to 
                        the Board finding for which the whistleblower 
                        otherwise could receive an award under this 
                        section;
                            ``(iii) to any whistleblower who gains the 
                        information through the performance of an audit 
                        of financial statements required under the 
                        securities laws and for whom such submission 
                        would be contrary to the requirements of 
                        section 10A of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78j-1); and
                            ``(iv) to any whistleblower who fails to 
                        submit information to the Board in such form as 
                        the Board may, by rule, require.
            ``(4) Representation.--
                    ``(A) Permitted representation.--Any whistleblower 
                who makes a claim for an award under paragraph (2) may 
                be represented by counsel.
                    ``(B) Required representation.--
                            ``(i) In general.--Any whistleblower who 
                        anonymously makes a claim for an award under 
                        paragraph (2) shall be represented by counsel 
                        if the whistleblower anonymously submits the 
                        information upon which the claim is based.
                            ``(ii) Disclosure of identity.--Prior to 
                        the payment of an award, a whistleblower shall 
                        disclose the identity of the whistleblower and 
                        provide such other information as the Board may 
                        require, directly or through counsel, for the 
                        whistleblower.
            ``(5) No contract necessary.--No contract with the Board is 
        necessary for any whistleblower to receive an award under 
        paragraph (2), unless otherwise required by the Board by rule.
            ``(6) Appeals.--Any determination made under this 
        subsection, including whether, to whom, or in what amount to 
        make awards, shall be in the discretion of the Board. Any such 
        determination, except the determination of the amount of an 
        award if the award was made in accordance with this paragraph, 
        may be appealed to the Commission not more than 30 days after 
        the determination is issued by the Board. The Commission shall 
        review the determination made by the Board in accordance with 
        section 107(c).
            ``(7) Protection of whistleblowers.--
                    ``(A) Prohibition against retaliation.--No employer 
                may discharge, demote, suspend, threaten, harass, 
                directly or indirectly, or in any other manner 
                discriminate against, a whistleblower in the terms and 
                conditions of employment because of any lawful act done 
                by the whistleblower--
                            ``(i) in providing information to the Board 
                        in accordance with this subsection;
                            ``(ii) in initiating, testifying in, or 
                        assisting in any investigation or judicial or 
                        administrative action of the Board based upon 
                        or related to such information; or
                            ``(iii) in making disclosures that are 
                        required or protected under the Sarbanes-Oxley 
                        Act of 2002 (15 U.S.C. 7201 et seq.), the 
                        Securities Exchange Act of 1934 (15 U.S.C. 78a 
                        et seq.), including section 10A(m) of such Act 
                        (15 U.S.C. 78f(m)), section 1513(e) of title 
                        18, United States Code, and any other law, 
                        rule, or regulation subject to the jurisdiction 
                        of the Securities Exchange Commission.
                            ``(iv) in providing information regarding 
                        any conduct that the whistleblower reasonably 
                        believes constitutes a potential violation of 
                        any law, rule, or regulation subject to the 
                        jurisdiction of the Board or the Commission 
                        (including disclosures that are required or 
                        protected under the Sarbanes-Oxley Act of 2002 
                        or the Securities Exchange Act of 1934) to--
                                    ``(I) a person with supervisory 
                                authority over the whistleblower at the 
                                whistleblower's employer, where such 
                                employer is an entity registered with 
                                or required to be registered with the 
                                Board, the Commission, a self-
                                regulatory organization, or a State 
                                securities commission or office 
                                performing like functions; or
                                    ``(II) such other person working 
                                for the employer described under 
                                subclause (I) who has the authority to 
                                investigate, discover, or terminate 
                                misconduct.
                    ``(B) Enforcement of prohibition against 
                retaliation.--
                            ``(i) Cause of action.--An individual who 
                        alleges discharge or other discrimination in 
                        violation of subparagraph (A) may bring an 
                        action under this paragraph in the appropriate 
                        district court of the United States for the 
                        relief provided in subparagraph (C).
                            ``(ii) Subpoenas.--A subpoena requiring the 
                        attendance of a witness at a trial or hearing 
                        conducted under this subsection may be served 
                        at any place in the United States.
                            ``(iii) Statute of limitations.--
                                    ``(I) In general.--An action under 
                                this paragraph may not be brought--
                                            ``(aa) more than 6 years 
                                        after the date on which the 
                                        violation of subparagraph (A) 
                                        occurred; or
                                            ``(bb) more than 3 years 
                                        after the date when facts 
                                        material to the right of action 
                                        are known or reasonably should 
                                        have been known by the employee 
                                        alleging a violation of 
                                        subparagraph (A).
                                    ``(II) Required action within 10 
                                years.--Notwithstanding subclause (I), 
                                an action under this paragraph may not 
                                in any circumstance be brought more 
                                than 10 years after the date on which 
                                the violation occurs.
                    ``(C) Relief.--Relief for an individual prevailing 
                in an action brought under this paragraph shall 
                include--
                            ``(i) reinstatement with the same seniority 
                        status that the individual would have had, but 
                        for the discrimination;
                            ``(ii) two times the amount of back pay 
                        otherwise owed to the individual, with 
                        interest; and
                            ``(iii) compensation for litigation costs, 
                        expert witness fees, and reasonable attorneys' 
                        fees.
                    ``(D) Confidentiality.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Board and any officer or 
                        employee of the Board may not disclose any 
                        information, including information provided by 
                        a whistleblower to the Board, which could 
                        reasonably be expected to reveal the identity 
                        of a whistleblower unless and until required to 
                        be disclosed to a defendant or respondent in 
                        connection with a public proceeding instituted 
                        by the Commission or any entity described in 
                        clause (iii).
                            ``(ii) Rule of construction.--Nothing in 
                        this section is intended to limit, or shall be 
                        construed to limit, the ability of the Attorney 
                        General to present such evidence to a grand 
                        jury or to share such evidence with potential 
                        witnesses or defendants in the course of an 
                        ongoing criminal investigation.
                            ``(iii) Availability to government 
                        agencies.--
                                    ``(I) In general.--Without the loss 
                                of its status as confidential in the 
                                hands of the Board, all information 
                                referred to in clause (i) may, in the 
                                discretion of the Board, when 
                                determined by the Board to be necessary 
                                to accomplish the purposes of this Act 
                                and to protect investors, be made 
                                available to--
                                            ``(aa) the Attorney General 
                                        of the United States;
                                            ``(bb) an appropriate 
                                        regulatory authority;
                                            ``(cc) a self-regulatory 
                                        organization;
                                            ``(dd) a State attorney 
                                        general in connection with any 
                                        criminal investigation;
                                            ``(ee) any appropriate 
                                        State regulatory authority;
                                            ``(ff) the Commission;
                                            ``(gg) a foreign securities 
                                        authority; and
                                            ``(hh) a foreign law 
                                        enforcement authority.
                                    ``(II) Confidentiality.--
                                            ``(aa) In general.--Each of 
                                        the entities described in items 
                                        (aa) through (ff) of subclause 
                                        (I) shall maintain such 
                                        information as confidential in 
                                        accordance with the 
                                        requirements established under 
                                        clause (i).
                                            ``(bb) Foreign 
                                        authorities.--Each of the 
                                        entities described in 
                                        subclauses (gg) and (hh) of 
                                        subclause (I) shall maintain 
                                        such information in accordance 
                                        with such assurances of 
                                        confidentiality as the Board 
                                        determines appropriate.
                    ``(E) Rights retained.--Nothing in this subsection 
                shall be deemed to diminish the rights, privileges, or 
                remedies of any whistleblower under any Federal or 
                State law, or under any collective bargaining 
                agreement.
            ``(8) Provision of false information.--A whistleblower 
        shall not be entitled to an award under this section if the 
        whistleblower--
                    ``(A) knowingly and willfully makes any false, 
                fictitious, or fraudulent statement or representation; 
                or
                    ``(B) uses any false writing or document knowing 
                the writing or document contains any false, fictitious, 
                or fraudulent statement or entry.
            ``(9) Rulemaking authority.--The Board shall have the 
        authority to issue such rules and standards as may be necessary 
        or appropriate to implement the provisions of this section 
        consistent with the purposes of this section.
            ``(10) Coordination.--To the maximum extent practicable, 
        the Board shall coordinate with the Office of the Whistleblower 
        of the Securities Exchange Commission in carrying out this 
        subsection.''; and
            (2) in section 109(c)(2) (15 U.S.C. 7219(c)(2), by striking 
        ``all funds collected'' and inserting ``at least 50 percent of 
        funds collected''.

SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the House Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

            Passed the House of Representatives September 19, 2019.

            Attest:

                                             CHERYL L. JOHNSON,

                                                                 Clerk.
```