LexisNexis® Legal Newsroom
SEC Implements the “Bad Actor” Disqualification Provisions of Dodd-Frank

Previously, I summarized the Securities and Exchange Commission’s implementing regulations of Title II of the JOBS Act , lifting the ban on general solicitation for offerings exempt under Rule 506 of Regulation D, which were finalized on July 10, 2013. At the same meeting, the SEC also finalized...

The SEC's Proposed Pay Ratio Disclosure Requirements: Another Fine Mess

Among the many measures Congress included when it enacted the sweeping Dodd-Frank Act in 2010 was a provision directing the SEC to require companies to disclose the ratio of CEO compensation to median employee compensation. The statutory provision, incorporated into Section 953(b) of the Act, reflected...

Has the Whistleblower Moment Arrived? SEC Awards Whistleblower More Than $14 Million

It is not the first whistleblower award under the Dodd Frank Act’s whistleblower bounty program but the “more than $14 million” award to an anonymous whistleblower that the SEC announced on October 1, 2013 is by far the largest so far. The size of the award raises the question of what...

Whistleblower Report Follow-On Securities Suit: We'll Be Seeing More of These

On October 30, 2013, the SEC announced another whistleblower bounty award under the Dodd-Frank whistleblower program. Although the size of this latest award ($150,000) is relatively modest compared to the recent $14 million award (about which refer here ), the most recent award does suggest that awards...

SEC Releases Fiscal 2013 Whistleblower Report

Whistleblower reports to the SEC continued to rise during the latest fiscal year, according to the agency’s annual Dodd-Frank Whistleblower Program report to Congress. According to the November 15, 2013 report, a copy of which can be found here , there were 3,238 whistleblower reports to the SEC...

Dodd-Frank’s Intersection With the Bankruptcy Code Could Have Significant Impact for Unsecured Creditors

by Sean Cornely On February 11th, the three private plaintiff-appellants and eleven State plaintiff-appellants in State National Bank of Big Spring, et al. v. Jacob J. Lew, et al. filed briefs with the U.S. Court of Appeals for the District of Columbia Circuit in their appeal of the District Court’s...

Conflicts at Fund Adviser Yields First SEC Whistleblower Action

The Commission brought its first action involving the anti-retaliation provisions of the Dodd-Frank Act. It centers on an investment adviser, a broker dealer, conflicts and retaliation against a firm employee who reported the misconduct to the SEC and later informed his employer of that report. In the...

Dodd-Frank Anti-Retaliation Provisions Do Not Protect Overseas Whistleblowers

In the latest fiscal year report of the SEC Office of the Whistleblower, the agency reported that as of the end of the 2013 fiscal year it had received a total of 6,573 whistleblower reports since the the Dodd-Frank whistleblower program’s inception. These figures include not only domestic whistleblower...

FRB Issues Proposed Rules to Repeal Regulation AA, as Required by Dodd-Frank

by Edmund D. Harllee and Alan B. Clark On Wednesday, August 27, the Board of Governors of the Federal Reserve System (the “Board”) published in the Federal Register proposed rules and a request for public comment to repeal its Regulation AA (Unfair or Deceptive Acts or Practices). The...

SEC Announces Largest Yet Whistleblower Bounty Award of Over $30 Million

In what is by far the largest whistleblower bounty award yet under the Dodd-Frank’s whistleblower provisions, the SEC on September 22, 2014 announced an award of between $30 and $35 million to a whistleblower who provided original information that led to a successful SEC enforcement action. In...

SEC: Number of Whistleblower Reports Continues to Increase

The number of whistleblower reports to the SEC increased again in the latest fiscal year, according to the annual report of the SEC whistleblower office. The report, which the SEC is required by the Dodd-Frank Act to provide to Congress annually, is entitled the “2014 Annual Report to Congress...

SEC: Whistleblower Protections Extend to Those Who Report Internally

A critical component of the SEC’s whistleblower program is the anti-retaliatory provisions of Exchange Act Section 21F, added to the statute by the Dodd-Frank Act. To implement that provision the Commission promulgated two rules. The first, Exchange Act Rule 21F-2(b)(2) provides that the agency...

Whistleblowing: What Difference Does it Make?

In recent years, one of the favored responses of legislative reformers and regulatory enforcement authorities to financial fraud and other corporate misconduct has been the encouragement of whistleblowing activity. Both the Sarbanes-Oxley and the Dodd-Frank Act contained elaborate provisions designed...

The SEC’s New Whistleblower Action: Is It Counterproductive?

The SEC brought its first enforcement action centered on corporate restrictions which could impact employee whistleblowers, deterring them from reporting to the agency. Specifically, the Commission alleged that a policy at KBR, Inc. which precluded the disclosure of information by an employee about that...

SEC Halts “Smart Contract” Exchange Built on Silicon Valley Start-Ups

Two entrepreneurs wanted to create a business that centered on valuing private start-up companies. They experimented with models that began with a variation of “fantasy sports,” changed to a contest and became a game. It ended with one which involved securities based swaps sold in violation...

Controversy Surrounds SEC’s New Proposed Dodd-Frank Executive Compensation Clawback Rules

On July 1, 2015, a divided SEC voted 3-2 to propose rules directing the securities exchanges to adopt standards requiring listed companies to adopt policies requiring the companies’ executive officers to pay back incentive-based compensation in the event the company restates its financials for...

Is the Dodd-Frank Whistleblower Bounty Program Gaining Momentum?

While the SEC’s Dodd-Frank whistleblower program has drawn significant attention, the fact is that the program has gotten off to a slow start. As of the end of the last fiscal year, the SEC had during the program’s history received a total of 10,193 whistleblower reports, but had made only...

Dodd-Frank Hits 5th Birthday

The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed by the President on July 21, 2010. Quite a different world then. Some, like its namesakes, think it has made our banking and economic system safer and has been successfully implemented by the regulators. Others say that some...

CFPB Reflects on Five Years of Dodd-Frank Enforcement in Written Senate Testimony

by Mark J. Magyar On July 15, 2015, the Consumer Financial Protection Bureau (“CFPB”) published on its website the written testimony of CFPB Director Richard Cordray before the Senate Committee on Banking, Housing, and Urban Affairs. In his testimony, Mr. Cordray noted that “[n]ext...

SEC Commissioner Gallagher on Dodd-Frank and Staff Divisions

SEC Commissioner Daniel Gallagher provided something of a score card for activities over the past five years he has served on the agency prior to his impending departure. To the surprise of few he panned the Dodd-Frank and the FSOC while giving the staff divisions mixed reviews. “Dodd-Frank at...

SEC Passes CEO Pay-Ratio Rules on Partisan Lines

A sharply divided Securities and Exchange Commission approved rules mandated by the Dodd-Frank Act requiring most companies to disclose the ratio of their CEO’s pay to their average median employee salaries. The two Republican commissioners strongly opposed the rules on various grounds. A controversial...

SEC Enjoined For Failing to Timely Issue Mineral Disclosure Rule

The Dodd-Frank Wall Street Reform Act imposed a requirement on the SEC in Section 1504 to promulgate a disclosure rule regarding certain extraction payments involving resource issuers within 270 days of passage or by April 17, 2011. The history of the Commission’s efforts in this area is riddled...

The SEC, Second Circuit, and Whistleblowers: Searching For Ambiguity

The SEC’s interpretation of the Dodd-Frank whistleblower provisions prevailed in a recent Second Circuit decision, creating a circuit split that could be heading for the Supreme Court. Specifically, the Circuit Court deferred to the SEC’s interpretation of the provisions under which whistleblowers...

No SEC Report, No “Whistleblower” Problem

Second Circuit allows Dodd-Frank retaliation claim by Darryl Wade Anderson , Jonathan S. Franklin , Mark Thomas Oakes , and Eliot Turner On Thursday, September 10, the Second Circuit issued the second appellate decision interpreting the scope of the anti-retaliation provision protecting whistleblowers...

SEC Adopts Final Pay Ratio Disclosure Rules

A registrant's initial pay ratio disclosure will be required for its first full fiscal year beginning on or after January 1, 2017. The U.S. Securities and Exchange Commission (SEC) has adopted final pay ratio disclosure rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act...