Whistleblower Protection Reform Act of 2021
Bill: H.R.5485 | Sponsor: Rep. Green, Al (D-TX)
Policy area: Finance and Financial Sector

Summary:
Whistleblower Protection Reform Act of 2021
This bill expands and revises whistleblower protections applicable to individuals who provide information to the Securities and Exchange Commission (SEC) relating to a violation of securities laws.
The prohibition of retaliation against whistleblowers is expanded to include individuals who provide information regarding potential violations to supervisors or other employees in positions of authority, including as part of their job duties.
Additionally, the bill establishes the burden of proof regarding an unfavorable personnel action against a whistleblower, including evidence needed to prove that the whistleblower's conduct was a contributing factor in such an action. The bill also deems as unenforceable a predispute arbitration agreement regarding such an action and makes additional categories of sanctions eligible for distribution as part of whistleblower awards.

To amend the Securities Exchange Act of 1934 to expand the definition 
    of whistleblower and increase 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 ``Whistleblower Protection Reform Act 
of 2021''.

SEC. 2. WHISTLEBLOWER PROTECTION ENHANCEMENTS.

    (a) In General.--Section 21F of the Securities Exchange Act of 1934 
(15 U.S.C. 78u-6) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (4)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) any monies, including penalties, 
                disgorgement, and interest, ordered to be paid or 
                otherwise ordered as relief, including in--
                            ``(i) a non-prosecution agreement entered 
                        by the Attorney General;
                            ``(ii) a deferred prosecution agreement 
                        entered by the Attorney General; and
                            ``(iii) an agreement entered by the 
                        Commission to settle a covered judicial or 
                        administrative proceeding; and'';
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) any monies recovered by a bankruptcy trustee 
                as a result of the original information provided by a 
                whistleblower.''; and
                    (B) in paragraph (6)--
                            (i) by striking ``(6) whistleblower.--The 
                        term'' and inserting:
            ``(6) Whistleblower.--
                    ``(A) In general.--The term''; and
                            (ii) by adding at the end the following:
                    ``(B) Special rule.--Solely for the purposes of 
                subsection (h)(1), the term `whistleblower' shall also 
                include any individual who takes an action described in 
                subsection (h)(1)(A), or two or more individuals acting 
                jointly who take an action described in subsection 
                (h)(1)(A), including as part of the job duties of such 
                individual or individuals.'';
            (2) in subsection (b), by adding at the end the following:
            ``(3) Related actions.--When determining whether to pay an 
        award to a whistleblower in a related action, the Commission 
        may not consider whether another whistleblower reward program 
        has a more direct or relevant connection to such related action 
        based on information provided by such whistleblower.'';
            (3) in subsection (c)(1)(B)(ii), by striking ``the balance 
        of the Fund'' and inserting ``the balance of the Investor 
        Protection Fund or the amount of the potential award'';
            (4) in subsection (g)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) funding the operations of the Securities 
                Exchange Commission Office of the Whistleblower.'';
            (5) in subsection (h)(1)--
                    (A) in subparagraph (A)--
                            (i) by striking ``, directly or 
                        indirectly,'';
                            (ii) by striking ``discharge,'' and 
                        inserting ``directly or indirectly discharge'';
                            (iii) by striking ``employment'' and 
                        inserting ``employment or post-employment'';
                            (iv) in clause (i), by striking ``to the 
                        Commission'' and inserting ``to the Commission 
                        orally or in writing'';
                            (v) in clause (ii), by striking ``or'' at 
                        the end;
                            (vi) in clause (iii)--
                                    (I) by striking ``that are required 
                                or protected under'' and inserting 
                                ``with respect to any conduct that the 
                                whistleblower reasonably believes 
                                evidences a violation of or is 
                                protected under''; and
                                    (II) by striking the period at the 
                                end and inserting ``; or''; and
                            (vii) by adding at the end the following:
                            ``(iv) in providing information regarding 
                        any conduct that has occurred, is ongoing, or 
                        is about to occur that the whistleblower 
                        reasonably believes constitutes a violation of 
                        any law, rule, or regulation subject to the 
                        jurisdiction of the Commission--
                                    ``(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 
                                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) in subparagraph (B)--
                            (i) by adding at the end the following:
                            ``(iv) Jury.--Each party to an action 
                        brought under subsection (h) of this section 
                        shall be entitled to a trial by jury.
                            ``(v) Burdens of proof.----
                                    ``(I) In general.--With respect to 
                                any complaint filed under this 
                                paragraph by a whistleblower against an 
                                employer, a whistleblower shall prevail 
                                in the action upon a showing that 
                                protected conduct was a contributing 
                                factor in the unfavorable personnel 
                                action alleged in the complaint.
                                    ``(II) Establishment of 
                                contribution factor.--A whistleblower 
                                may establish that the protected 
                                conduct was a contributing factor in 
                                the personnel action through 
                                circumstantial evidence, including 
                                evidence that--
                                            ``(aa) the official that 
                                        took the personnel action knew 
                                        of the protected conduct 
                                        engaged in by the 
                                        whistleblower; and
                                            ``(bb) the official that 
                                        took the personnel action did 
                                        so within a period of time such 
                                        that a reasonable person could 
                                        conclude that the protected 
                                        conduct engaged in by the 
                                        whistleblower was a 
                                        contributing factor in the 
                                        personnel action.''; and
                            (ii) in clause (iii)(I)(bb), by striking 
                        ``3'' and inserting ``6''; and
                    (C) in subparagraph (C)--
                            (i) in clause (ii), by striking ``and'' at 
                        the end;
                            (ii) by striking clause (iii) and inserting 
                        the following:
                            ``(iii) the payment of compensatory 
                        damages, including compensation for litigation 
                        costs, expert witness fees, and reasonable 
                        attorneys' fees; and''; and
                            (iii) by adding at the end the following:
                            ``(iv) any other appropriate remedy as 
                        determined by the Board with respect to the 
                        conduct that is the subject of the 
                        complaint.''; and
            (6) by adding at the end the following:
    ``(k) Nonenforceability of Certain Provisions Waiving Rights and 
Remedies or Requiring Arbitration.--
            ``(1) In general.--The rights and remedies provided under 
        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.--If a predispute 
        arbitration agreement requires arbitration of a dispute arising 
        under this section such predispute arbitration agreement is not 
        valid or enforceable.
            ``(3) Effective date.--This subsection shall be effective 
        with respect to any action or agreement that is filed on or 
        after, or that is pending as of, the date of enactment of this 
        Act.''.
    (b) Timely Processing of Claims.--
            (1) In general.--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 any claim 
                        timely submitted by a whistleblower for an 
                        award under this section not later than 1 year 
                        after the submission deadline established by 
                        the Commission, by rule, for a whistleblower to 
                        file a claim.
                            ``(ii) Multiple actions.--If a claim 
                        submitted by a whistleblower for an award under 
                        this section involves 1 or more related 
                        actions, the requirement described in clause 
                        (i) shall apply with respect to the latest of 
                        the submission deadlines applying to such 
                        claims.
                    ``(B) Exceptions.--
                            ``(i) Initial extension.--If the Director 
                        of the Division of Enforcement of the 
                        Commission (in this paragraph referred to as 
                        the `Director'), determines that a claim is 
                        sufficiently complex or involves more than one 
                        whistleblower, or if other good cause exists 
                        such that, as determined by the Director, the 
                        Commission cannot reasonably satisfy the 
                        requirements described in subparagraph (A), the 
                        Director may, after providing notice to the 
                        Commission, extend the submission deadline 
                        established by the Commission for a 
                        whistleblower to file a claim as it applies to 
                        such by not more than 180 days.
                            ``(ii) Additional extensions.--If, after 
                        providing an extension under clause (i), the 
                        Director determines that the Commission cannot 
                        reasonably satisfy the requirements under 
                        subparagraph (A) with respect to an award 
                        claim, as extended under clause (i), the 
                        Director may, after providing notice to the 
                        Commission, extend the period in which the 
                        Commission may satisfy subparagraph (A) by 1 
                        additional 180 days.
                            ``(iii) Notice to whistleblower required.--
                        If the Director exercises the extension 
                        authority described under clause (i) or clause 
                        (ii), the Director shall submit to the 
                        whistleblower that filed the award claim that 
                        is subject to that extension action by the 
                        Director with a written notification of such 
                        extension action by the Director or the 
                        designee.''.
            (2) Rules.--The Securities and Exchange Commission shall, 
        not later than one year after the date of the enactment of this 
        Act, issue such rules as the Securities and Exchange Commission 
        determines necessary to carry out section 21F(b)(3) of the 
        Securities Exchange Act of 1934.
    (c) Effective Date.--Except as otherwise provided, the amendments 
made by this Act shall apply with respect to any claim involving a 
violation of section 21F(h)(1) of the Securities Act of 1934, including 
any claim in an enforcement action or proceeding brought by the 
Securities and Exchange Commission that is pending in any appropriate 
judicial or administrative forum on the date of the enactment of this 
Act.
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