Whistleblower Protection Reform Act of 2021

Bill: 117-hr-5485
Sponsor: full_name: Rep. Green, Al [D-TX-9]
Introduced: 2021-10-05
Policy area: Finance and Financial Sector
Latest action: action_date: 2021-10-05
text: Referred to the House Committee on Financial Services.

Summaries:
action_date: 2021-10-05
action_desc: Introduced in House
text: <p><strong>Whistleblower Protection Reform Act of 2021 </strong></p> <p>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. </p> <p>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. </p> <p>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.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 5485 IN THE HOUSE OF REPRESENTATIVES October 5, 2021 Mr. Green of Texas introduced the following bill; which was referred to the Committee on Financial Services A BILL 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.

1. Short title This Act may be cited as the Whistleblower Protection Reform Act of 2021 . 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.