Confidentiality Agreements And Whistleblower Compliance

Staff in the Office of Compliance Inspections and Examinations (the "Staff") recently issued a Risk Alert¹ (the "Risk Alert") regarding compliance with key whistleblower provisions arising out of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The Risk Alert follows several enforcement actions recently brought by the Securities and Exchange Commission (the "Commission") charging violations of Rule 21F-17 of the Commission's whistleblower regulations.²

The Dodd-Frank Act amended the Securities Exchange Act of 1934 ("Exchange Act") by adding Section 21F, entitled "Securities Whistleblower Incentives and Protection." To aid in the implementation of Section 21F the Commission adopted Rule 21F-17³ under the Exchange Act, which provides that "no person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to