I 

112TH CONGRESS 

1ST SESSION H. R. 2483 

To amend the Securities Exchange Act of 1934 and the Commodity Exchange 

Act to modify certain provisions relating to whistleblower incentives and 

protection. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 11, 2011 

Mr. GRIMM (for himself, Mr. GARRETT, Mr. STIVERS, and Mr. CAMPBELL) 

introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a 

period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Securities Exchange Act of 1934 and the 

Commodity Exchange Act to modify certain provisions 

relating to whistleblower incentives and protection. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Whistleblower Im5 provement Act of 2011’’. 


jbell on DSKDVH8Z91PROD with BILLS
2 

•HR 2483 IH

1 SEC. 2. AMENDMENTS TO THE SECURITIES EXCHANGE ACT 

2 OF 1934. 

3 (a) EXCLUSION OF CERTAIN COMPLIANCE OFFICERS

4 AND INTERNAL REPORTING AS A CONDITION OF

5 AWARD.—Section 21F of the Securities Exchange Act of 

6 1934 (15 U.S.C. 78u–6) is amended— 

7 (1) in subsection (b), by redesignating para8 graph (2) as paragraph (3) and inserting after para9 graph (1) the following: 

10 ‘‘(2) INTERNAL REPORTING REQUIRED.—In the 

11 case of a whistleblower who is an employee providing 

12 information relating to misconduct giving rise to the 

13 violation of the securities laws that was committed 

14 by his or her employer or another employee of the 

15 employer, to be eligible for an award under this sec16 tion, the whistleblower, or any person obtaining re17 portable information from the whistleblower, shall— 

18 ‘‘(A) first report the information described 

19 in paragraph (1) to his or her employer before 

20 reporting such information to the Commission; 

21 and 

22 ‘‘(B) report such information to the Com23 mission not later than 180 days after reporting 

24 the information to the employer.’’; and 

25 (2) in subsection (c)(2)— 


jbell on DSKDVH8Z91PROD with BILLS
3 

•HR 2483 IH

1 (A) in subparagraph (C), by striking ‘‘or’’ 

2 at the end; and 

3 (B) by redesignating subparagraph (D) as 

4 subparagraph (F) and inserting after subpara5 graph (C) the following: 

6 ‘‘(D) to any whistleblower who fails to first 

7 report the information described in subsection 

8 (b)(1) that is the basis for the award to his or 

9 her employer before reporting such information 

10 to the Commission, in the case where the mis11 conduct giving rise to the violation of the secu12 rities laws was committed by such employer or 

13 an employee of the employer, unless the whistle14 blower alleges and the Commission determines 

15 that the employer lacks either a policy prohib16 iting retaliation for reporting potential mis17 conduct or an internal reporting system allow18 ing for anonymous reporting, or the Commis19 sion determines in a preliminary investigation 

20 not exceeding 30 days that internal reporting 

21 was not a viable option for the whistleblower 

22 based on— 

23 ‘‘(i) evidence that the alleged mis24 conduct was committed by or involved the 


jbell on DSKDVH8Z91PROD with BILLS
4 

•HR 2483 IH

1 complicity of the highest level of manage2 ment; or 

3 ‘‘(ii) other evidence of bad faith on 

4 the part of the employer; 

5 ‘‘(E) to any whistleblower who has legal, 

6 compliance, or similar responsibilities for or on 

7 behalf of an entity and has a fiduciary or con8 tractual obligation to investigate or respond to 

9 internal reports of misconduct or violations or 

10 to cause such entity to investigate or respond to 

11 the misconduct or violations, if the information 

12 learned by the whistleblower during the course 

13 of his or her duties was communicated to such 

14 a person with the reasonable expectation that 

15 such person would take appropriate steps to so 

16 respond; and’’. 

17 (b) ELIMINATION OF MINIMUM AWARD REQUIRE18 MENT.—Subsection (b)(1) of such section is amended— 

19 (1) by striking ‘‘shall’’ and inserting ‘‘may’’; 

20 and 

21 (2) by striking ‘‘in an aggregate amount equal 

22 to—’’ and all that follows and inserting ‘‘an amount 

23 determined by the Commission but not more than 30 

24 percent, in total, of what has been collected of the 


jbell on DSKDVH8Z91PROD with BILLS
5 

•HR 2483 IH

1 monetary sanctions imposed in the action or related 

2 actions.’’. 

3 (c) EXCLUSION OF WHISTLEBLOWERS FOUND CUL4 PABLE.—Subsection (c)(2)(B) of such section is amended 

5 by inserting ‘‘, is found civilly liable, or is otherwise deter6 mined by the Commission to have committed, facilitated, 

7 participated in, or otherwise been complicit in misconduct 

8 related to such violation’’ after ‘‘violation’’. 

9 (d) RULE OF CONSTRUCTION RELATING TO OTHER

10 WORKPLACE POLICIES.—Subsection (h)(1) of such sec11 tion is amended by adding at the end the following: 

12 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

13 in this paragraph shall be construed as prohib14 iting or restricting any employer from enforcing 

15 any established employment agreements, work16 place policies, or codes of conduct against a 

17 whistleblower, and any adverse action taken 

18 against a whistleblower for any violation of such 

19 agreements, policies, or codes shall not con20 stitute retaliation for purposes of this para21 graph, provided such agreements, policies, or 

22 codes are enforced consistently with respect to 

23 other employees who are not whistleblowers.’’. 

24 (e) NOTIFICATION TO EMPLOYER.—Paragraph (2) of 

25 subsection (h) of such section is amended— 


jbell on DSKDVH8Z91PROD with BILLS
6 

•HR 2483 IH

1 (1) in the paragraph heading, by striking ‘‘CON2 FIDENTIALITY’’ and inserting ‘‘NOTIFICATION TO

3 EMPLOYER AND CONFIDENTIALITY’’; 

4 (2) by redesignating subparagraph (A) through 

5 (D) as subparagraphs (B) through (E), respectively; 

6 (3) by inserting a new subparagraph (A) as fol7 lows: 

8 ‘‘(A) NOTIFICATION OF INVESTIGATION.— 

9 ‘‘(i) NOTIFICATION REQUIRED.—Prior 

10 to commencing any enforcement action re11 lating in whole or in part to any informa12 tion reported to it by a whistleblower, the 

13 Commission shall notify any entity that is 

14 to be subject to such action of information 

15 received by the Commission from a whistle16 blower who is an employee of such entity 

17 to enable the entity to investigate the al18 leged misconduct and take remedial action, 

19 unless the Commission determines in the 

20 course of a preliminary investigation of the 

21 alleged misconduct, not exceeding 30 days, 

22 that such notification would jeopardize 

23 necessary investigative measures and im24 pede the gathering of relevant facts, based 

25 on— 


jbell on DSKDVH8Z91PROD with BILLS
7 

•HR 2483 IH

1 ‘‘(I) evidence that the alleged 

2 misconduct was committed by or in3 volved the complicity of the highest 

4 level management of the entity; or 

5 ‘‘(II) other evidence of bad faith 

6 on the part of the entity. 

7 ‘‘(ii) GOOD FAITH.—Where an entity 

8 notified under clause (i) responds in good 

9 faith, which may include conducting an in10 vestigation, reporting results of such an in11 vestigation to the Commission, and taking 

12 appropriate corrective action, the Commis13 sion shall treat the entity as having self-re14 ported the information and its actions in 

15 response to such notification shall be eval16 uated in accordance with the Commission’s 

17 policy statement entitled ‘Report of Inves18 tigation Pursuant to Section 21(a) of the 

19 Securities Exchange Act of 1934 and 

20 Statement of the Relationship of Coopera21 tion to Agency Enforcement Decisions’.’’; 

22 and 

23 (4) in the heading of subparagraph (B) (as re24 designated by paragraph (3)), by striking ‘‘IN GEN25 ERAL’’ and inserting ‘‘CONFIDENTIALITY’’. 


jbell on DSKDVH8Z91PROD with BILLS
8 

•HR 2483 IH

1 SEC. 3. AMENDMENTS TO THE COMMODITY EXCHANGE 

2 ACT. 

3 (a) EXCLUSION OF CERTAIN COMPLIANCE OFFICERS

4 AND INTERNAL REPORTING AS A CONDITION OF

5 AWARD.—Section 23 of the Commodity Exchange Act (7 

6 U.S.C. 26) is amended— 

7 (1) in subsection (b), by redesignating para8 graph (2) as paragraph (3) and inserting after para9 graph (1) the following: 

10 ‘‘(2) INTERNAL REPORTING REQUIRED.—In the 

11 case of a whistleblower who is an employee providing 

12 information relating to misconduct giving rise to the 

13 violation of the securities laws that was committed 

14 by his or her employer or another employee of the 

15 employer, to be eligible for an award under this sec16 tion, the whistleblower, or any person obtaining re17 portable information from the whistleblower, shall— 

18 ‘‘(A) first reported the information de19 scribed in paragraph (1) to his or her employer 

20 before reporting such information to the Com21 mission; and 

22 ‘‘(B) report such information to the Com23 mission not later than 180 days after reporting 

24 the information to the employer.’’; and 

25 (2) in subsection (c)(2)— 


jbell on DSKDVH8Z91PROD with BILLS
9 

•HR 2483 IH

1 (A) in subparagraph (C), by striking ‘‘or’’ 

2 at the end; and 

3 (B) by redesignating subparagraph (D) as 

4 subparagraph (F) and inserting after subpara5 graph (C) the following: 

6 ‘‘(D) to any whistleblower who fails to first 

7 report the information described in subsection 

8 (b)(1) that is the basis for the award to his or 

9 her employer before reporting such information 

10 to the Commission, in the case where the mis11 conduct giving rise to the violation of the secu12 rities laws was committed by such employer or 

13 an employee of the employer, unless the whistle14 blower alleges and the Commission determines 

15 that the employer lacks either a policy prohib16 iting retaliation for reporting potential mis17 conduct or an internal reporting system allow18 ing for anonymous reporting, or the Commis19 sion determines in a preliminary investigation 

20 not exceeding 30 days that internal reporting 

21 was not a viable option for the whistleblower 

22 based on— 

23 ‘‘(i) evidence that the alleged mis24 conduct was committed by or involved the 


jbell on DSKDVH8Z91PROD with BILLS
10 

•HR 2483 IH

1 complicity of the highest level of manage2 ment; or 

3 ‘‘(ii) other evidence of bad faith on 

4 the part of the employer; 

5 ‘‘(E) to any whistleblower who has legal, 

6 compliance, or similar responsibilities for or on 

7 behalf of an entity and has a fiduciary or con8 tractual obligation to investigate or respond to 

9 internal reports of misconduct or violations or 

10 to cause such entity to investigate or respond to 

11 the misconduct or violations, if the information 

12 learned by the whistleblower on the course of 

13 his or her duties was communicated to such a 

14 person with the reasonable expectation that 

15 such person would take appropriate steps to so 

16 respond; and’’. 

17 (b) CAP ON AWARD IN CERTAIN CIRCUMSTANCES

18 AND ELIMINATION OF MINIMUM AWARD REQUIRE19 MENT.—Subsection (b)(1) of such section is amended— 

20 (1) by striking ‘‘shall’’ and inserting ‘‘may’’; 

21 and 

22 (2) by striking ‘‘in an aggregate amount equal 

23 to—’’ and all that follows and inserting ‘‘in an 

24 amount determined by the Commission but not more 

25 than 30 percent, in total, of what has been collected 


jbell on DSKDVH8Z91PROD with BILLS
11 

•HR 2483 IH

1 of the monetary sanctions imposed in the action or 

2 related actions.’’. 

3 (c) EXCLUSION OF WHISTLEBLOWERS FOUND CUL4 PABLE.—Subsection (c)(2)(B) of such section is amended 

5 by inserting ‘‘, is found civilly liable, or is otherwise deter6 mined by the Commission to have committed, facilitated, 

7 participated in, or been complicit in misconduct related to 

8 such a violation’’ after ‘‘violation’’. 

9 (d) RULE OF CONSTRUCTION RELATING TO OTHER

10 WORKPLACE POLICIES.—Subsection (h)(1) of such sec11 tion is amended by adding at the end the following: 

12 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

13 in this paragraph shall be construed as prohib14 iting or restricting any employer from enforcing 

15 any established employment agreements, work16 place policies, or codes of conduct against a 

17 whistleblower, and any adverse action taken 

18 against a whistleblower for any violation of such 

19 agreements, policies, or codes shall not con20 stitute retaliation for purposes of this para21 graph, provided such agreements, policies, or 

22 codes are enforced consistently with respect to 

23 other employees who are not whistleblowers.’’. 

24 (e) NOTIFICATION TO EMPLOYER.—Paragraph (2) of 

25 subsection (h) of such section is amended— 


jbell on DSKDVH8Z91PROD with BILLS
12 

•HR 2483 IH

1 (1) in the paragraph heading, by striking ‘‘CON2 FIDENTIALITY’’ and inserting ‘‘NOTIFICATION TO

3 EMPLOYER AND CONFIDENTIALITY’’; 

4 (2) by redesignating subparagraph (A) through 

5 (D) as subparagraphs (B) through (E), respectively; 

6 (3) by inserting a new subparagraph (A) as fol7 lows: 

8 ‘‘(A) NOTIFICATION TO EMPLOYER.— 

9 ‘‘(i) NOTIFICATION REQUIRED.—Prior 

10 to commencing any enforcement action re11 lating in whole or in part to any informa12 tion reported to it by a whistleblower, the 

13 Commission shall promptly notify any enti14 ty that is to be subject to such enforce15 ment of information received by the Com16 mission from a whistleblower who is an 

17 employee of such entity to enable the enti18 ty to investigate the alleged misconduct 

19 and take remedial action, unless the Com20 mission determines in the course of a pre21 liminary investigation not exceeding 30 

22 days of the alleged misconduct, that such 

23 notification would jeopardize necessary in24 vestigative measures and impede the gath25 ering of relevant facts, based on— 


jbell on DSKDVH8Z91PROD with BILLS
13 

•HR 2483 IH

1 ‘‘(I) evidence that the alleged 

2 misconduct was committed by or in3 volved the complicity of the highest 

4 level management of the entity; or 

5 ‘‘(II) other evidence of bad faith 

6 on the part of the entity. 

7 ‘‘(ii) GOOD FAITH.—Where an entity 

8 notified under clause (i) responds in good 

9 faith, which may include conducting an in10 vestigation, reporting results of such an in11 vestigation to the Commission, and taking 

12 appropriate corrective action, the Commis13 sion shall treat the entity as having self-re14 ported the information and its actions in 

15 response to such notification shall be eval16 uated accordingly.’’; and 

17 (4) in the heading of subparagraph (B) (as re18 designated by paragraph (3)), by striking ‘‘IN GEN19 ERAL’’ and inserting ‘‘CONFIDENTIALITY’’. 

20 SEC. 4. STUDY. 

21 The Comptroller General shall conduct a study to de22 termine what impact, if any, the whistleblower incentives 

23 program established under section 21F of the Securities 

24 Exchange Act of 1934 (15 U.S.C. 78u–6) and section 23 

25 of the Commodity Exchange Act (7 U.S.C. 26) has had 


jbell on DSKDVH8Z91PROD with BILLS
14 

•HR 2483 IH

1 on shareholder value. The Comptroller General shall 

2 transmit to Congress a report on the study not later than 

3 18 months after the date of enactment of this Act. 

Æ 


jbell on DSKDVH8Z91PROD with BILLS