Title: PCAOB Whistleblower Protection Act of 2019
Policy area: Finance and Financial Sector

Summary:
PCAOB Whistleblower Protection Act of 2019
This bill establishes a whistleblower protection program at the Public Company Accounting Oversight Board (PCAOB). Specifically, individuals reporting information to the PCAOB regarding securities law violations relating to audits (1) are protected from retaliation by an employer, and (2) could be eligible for a monetary reward. The reward program applies to individuals who voluntarily report original information that results in the PCAOB imposing civil penalties exceeding $2,500.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3625 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 3625

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              July 5, 2019

 Ms. Garcia of Texas introduced the following bill; which was referred 
                 to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 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 
                $2,500.
                    ``(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.--The term `whistleblower' 
                means any individual who provides, or 2 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, 
                auditor independence, and the obligations and 
                liabilities of accountants with respect thereto, 
                including the rules of the Board issued pursuant to 
                this Act, or professional standards governing auditors 
                and accountants.
            ``(2) Awards.--
                    ``(A) In general.--In any covered disciplinary 
                proceeding, the Board shall pay an award or awards to 1 
                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 50 percent, in total, 
                        of what has been collected of the monetary 
                        sanctions.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subparagraph (A), the Commission 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.
                    ``(C) 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 34 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 fails to 
                        submit information to the Board in such form as 
                        the Board may, by rule, require;
                            ``(iv) to any whistleblower who knowingly 
                        and willfully makes any false, fictitious, or 
                        fraudulent statement or representation; and
                            ``(v) to any whistleblower who uses any 
                        false writing or document knowing the writing 
                        or document contains any false, fictitious, or 
                        fraudulent statement or entry.
                    ``(D) Payment of awards.--Any amount paid under 
                subparagraph (A) shall be paid from any funds generated 
                from the collection of monetary sanctions.
            ``(3) 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.
            ``(4) 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.
            ``(5) 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 issue by the Board. The Commission shall 
        review the determination made by the Board in accordance with 
        section 107(c).
            ``(6) Protection of whistleblowers.--
                    ``(A) Prohibition against retaliation.--No current 
                or former employer may discharge, demote, suspend, 
                threaten, blacklist, harass, directly or indirectly, 
                actively or passively, or in any other manner 
                discriminate against any whistleblower in the terms and 
                conditions of employment, including compensation, 
                because of any lawful act done by the whistleblower 
                in--
                            ``(i) providing information to the Board in 
                        accordance with this subsection;
                            ``(ii) initiating, testifying in, or 
                        assisting in any investigation or 
                        administrative action of the Board based upon 
                        or related to such information;
                            ``(iii) 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 Commission; and
                            ``(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 Board 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 
                                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.--Any whistleblower who alleges discharge 
                or other discrimination or is otherwise aggrieved by an 
                employer in violation of subparagraph (A) may seek 
                relief--
                            ``(i) by filing a complaint with the 
                        Secretary of Labor; or
                            ``(ii) if the Secretary has not issued a 
                        final decision within 180 days of the filing of 
                        the complaint and there is no showing that such 
                        delay is due to the bad faith of the claimant, 
                        bringing an action at law or equity for de novo 
                        review in the appropriate district court of the 
                        United States, which shall have jurisdiction 
                        over such an action without regard to the 
                        amount in controversy.
                    ``(C) Procedure.--
                            ``(i) In general.--An action under 
                        subparagraph (B)(ii) shall be governed under 
                        the rules and procedures set forth in section 
                        42121(b) of title 49, United States Code.
                            ``(ii) Exception.--Notification made under 
                        section 42121(b)(1) of title 49, United States 
                        Code, shall be made to the person named in the 
                        complaint and to the employer.
                            ``(iii) Burdens of proof.--An action 
                        brought under subparagraph (B)(ii) shall be 
                        governed by the legal burdens of proof set 
                        forth in section 42121(b) of title 49, United 
                        States Code.
                            ``(iv) Statute of limitations.--An action 
                        under subparagraph (B) shall be commenced not 
                        later than 180 days after the date on which the 
                        violation occurs, or after the date on which 
                        the whistleblower became aware of the 
                        violation.
                            ``(v) Jury trial.--A party to an action 
                        brought under subparagraph (B) shall be 
                        entitled to trial by jury.
                    ``(D) Remedies.--Any whistleblower who prevails in 
                any action brought under this paragraph shall be 
                entitled to all relief necessary to make the 
                whistleblower whole, including--
                            ``(i) reinstatement with the same seniority 
                        status that the whistleblower would have had, 
                        but for the discrimination;
                            ``(ii) 2 times the amount of back pay 
                        otherwise owed to the whistleblower, with 
                        interest;
                            ``(iii) consequential and compensatory 
                        damages;
                            ``(iv) special damages, including damages 
                        for emotional distress and reputational harm; 
                        and
                            ``(v) compensation for litigation costs, 
                        expert witness fees, and reasonable attorneys' 
                        fees.
                    ``(E) 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 without the written consent of the 
                        whistleblower, including information provided 
                        by the whistleblower to the Board, which could 
                        reasonably be expected to reveal the identity 
                        of the whistleblower unless and until the Board 
                        is required to disclose such information to a 
                        defendant or respondent in connection with a 
                        public proceeding instituted by the Commission 
                        or any entity described in clause (iv).
                            ``(ii) Notice.--If the Board shall, before 
                        making information referred to in clause (i) 
                        available to a defendant or respondent in 
                        connection with a public proceeding instituted 
                        by the Commission or any entity described in 
                        clause (iv), provide notice to the 
                        whistleblower that such information is being 
                        made available.
                            ``(iii) 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.
                            ``(iv) 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.--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) and 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.
                                    ``(III) Notice.--If the Board makes 
                                information referred to in clause (i) 
                                available pursuant to subclause (I), 
                                the Board shall
                    ``(F) 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.
                    ``(G) Unenforceability.--
                            ``(i) Waiver of rights and remedies.--The 
                        rights and remedies provided for in this 
                        section may not be waived by any condition of 
                        employment, including a predispute arbitration 
                        agreement.
                            ``(ii) Required arbitration.--Any provision 
                        of a predispute arbitration agreement that 
                        requires arbitration of a dispute arising under 
                        this paragraph shall be invalid and 
                        unenforceable.''; 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''.
                                 <all>