SEC Whistleblower Reform Act of 2023

Subjects: Finance and Financial Sector


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 811 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 811

 To amend the Securities Exchange Act of 1934 to further enhance anti-
  retaliation protections for whistleblowers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 15, 2023

 Mr. Grassley (for himself, Ms. Warren, Ms. Collins, Mr. Warnock, and 
 Ms. Cortez Masto) introduced the following bill; which was read twice 
  and referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Securities Exchange Act of 1934 to further enhance anti-
  retaliation protections for whistleblowers, 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 ``SEC Whistleblower Reform Act of 
2023''.

SEC. 2. WHISTLEBLOWER PROTECTIONS FOR INTERNAL DISCLOSURES.

    (a) In General.--Section 21F of the Securities Exchange Act of 1934 
(15 U.S.C. 78u-6) is amended--
            (1) in subsection (a)(6)--
                    (A) by striking ``The term'' and inserting the 
                following:
                    ``(A) In general.--The term''; and
                    (B) by adding at the end the following:
                    ``(B) Special rule.--Solely for the purposes of 
                subsection (h)(1), the term `whistleblower' includes 
                any individual who takes, or 2 or more individuals 
                acting jointly who take, an action described in 
                subsection (h)(1)(A), that the individual or 2 or more 
                individuals reasonably believe relates to a violation 
                of any law, rule, or regulation subject to the 
                jurisdiction of the Commission, the Public Company 
                Accounting Oversight Board, the Municipal Securities 
                Rulemaking Board, or a self-regulatory organization.''; 
                and
            (2) in subsection (h)(1)--
                    (A) in subparagraph (A)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``or post-employment'' after ``of 
                        employment'';
                            (ii) in clause (i), by inserting ``, in 
                        writing or orally if the oral report is 
                        documented,'' after ``to the Commission'';
                            (iii) in clause (ii), by striking ``or'' at 
                        the end;
                            (iv) in clause (iii), by striking the 
                        period at the end and inserting ``; or''; and
                            (v) by adding at the end the following:
                            ``(iv) in providing information regarding 
                        any conduct that the whistleblower reasonably 
                        believes constitutes a violation of any law, 
                        rule, or regulation subject to the jurisdiction 
                        of the Commission to--
                                    ``(I) a person with supervisory 
                                authority over the whistleblower at the 
                                employer of the whistleblower, if that 
                                employer is an entity registered with, 
                                or required to be registered with, or 
                                otherwise subject to the jurisdiction 
                                of, the Commission, the Public Company 
                                Accounting Oversight Board, a self-
                                regulatory organization, or a State 
                                securities commission or office 
                                performing like functions; or
                                    ``(II) another individual working 
                                for the employer described in subclause 
                                (I) who the whistleblower reasonably 
                                believes has the authority to--
                                            ``(aa) investigate, 
                                        discover, or terminate the 
                                        misconduct; or
                                            ``(bb) take any other 
                                        action to address the 
                                        misconduct.''; and
                    (B) in subparagraph (B), by adding at the end the 
                following:
                            ``(iv) Jury trial.--A person against which 
                        an action is brought under this subsection 
                        shall be entitled to a jury trial.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to any claim involving a violation of section 21F(h)(1) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u-6(h)(1)), including a 
claim in an enforcement action or proceeding brought by the Securities 
and Exchange Commission, that is--
            (1) pending in any appropriate judicial or administrative 
        forum, as of the date of enactment of this Act; or
            (2) filed after the date of enactment of this Act.

SEC. 3. PROMPT PAYMENT OF AWARDS.

    Section 21F(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78u-6(b)) is amended by adding at the end the following:
            ``(3) Timely processing of claims.--
                    ``(A) Initial disposition.--
                            ``(i) In general.--Except as provided in 
                        subparagraph (B), the Commission shall make an 
                        initial disposition with respect to a claim 
                        submitted by a whistleblower for an award under 
                        this section (referred to in this paragraph as 
                        an `award claim') not later than the later of--
                                    ``(I) the date that is 1 year after 
                                the deadline established by the 
                                Commission, by rule, for the 
                                whistleblower to file the award claim; 
                                or
                                    ``(II) the date that is 1 year 
                                after the final resolution of all 
                                litigation, including any appeals, 
                                concerning the covered action or 
                                related action.
                            ``(ii) Multiple actions.--If an award claim 
                        involves 1 or more related actions, the 
                        requirement under clause (i) shall apply with 
                        respect to the latest deadline with respect to 
                        the actions.
                    ``(B) Exceptions.--
                            ``(i) Initial extension.--If the Director 
                        of the Division of Enforcement of the 
                        Commission (referred to in this paragraph as 
                        the `Director'), or the designee of the 
                        Director, determines that an award claim is 
                        sufficiently complex or involves more than 1 
                        whistleblower, or if other good cause exists 
                        such that the Commission cannot reasonably 
                        satisfy the requirements under subparagraph 
                        (A), as determined by the Director or the 
                        designee, as applicable, the Director or the 
                        designee, after providing notice to the 
                        Chairman of the Commission (referred to in this 
                        paragraph as the `Chairman'), may extend the 
                        deadline with respect to the satisfaction of 
                        those requirements by not more than 180 days.
                            ``(ii) Additional extensions.--If, after 
                        providing an extension under clause (i), the 
                        Director, or the designee of the Director, 
                        determines that good cause exists such that the 
                        Commission cannot reasonably satisfy the 
                        requirement under subparagraph (A), the 
                        Director or the designee of the Director, may 
                        extend the deadline described in clause (i) as 
                        needed for 1 or more additional successive 180-
                        day periods only after providing notice to and 
                        receiving approval from the Commission.
                            ``(iii) Notice to whistleblower required.--
                        If the Director, or the designee of the 
                        Director, exercises authority under clause (i) 
                        or (ii), the Director or the designee, as 
                        applicable, shall submit to the whistleblower 
                        who filed the award claim that is subject to 
                        that action by the Director or the designee a 
                        written notification of that action.
                    ``(C) Applicability.--This paragraph shall apply 
                only to an award claim that the Director of the 
                designee of the Director determines is timely submitted 
                under a deadline established by the Commission after 
                the date of enactment of this paragraph.''.

SEC. 4. NONENFORCEABILITY OF CERTAIN PROVISIONS.

    (a) In General.--Section 21F of the Securities Exchange Act of 1934 
(15 U.S.C. 78u-6) is amended by adding at the end the following:
    ``(k) Nonenforceability of Certain Provisions Waiving Rights and 
Remedies or Requiring Arbitration.--
            ``(1) Waiver of rights and remedies.--The rights and 
        remedies provided in this section may not be waived by any 
        agreement, policy form, or condition of employment, including 
        by a predispute arbitration agreement.
            ``(2) Predispute arbitration agreement.--No predispute 
        arbitration agreement shall be valid or enforceable if the 
        agreement requires the arbitration of a dispute arising under 
        this section.''.
    (b) Applicability.--Subsection (k) of section 21F of the Securities 
Exchange Act of 1934 (15 U.S.C. 78u-6), as added by subsection (a), 
shall apply with respect to any action that is filed on or after, or 
that is pending as of, the date of enactment of this Act.

SEC. 5. RULEMAKING AUTHORITY.

    The Securities and Exchange Commission may issue any rules that are 
necessary or appropriate to carry out this Act consistent with the 
purposes of section 21F of the Securities Exchange Act of 1934 (15 
U.S.C. 78u-6), as amended by this Act.
                                 &lt;all&gt;
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