SEC Whistleblower Enforcement Actions Related To Severance Agreements

On August 30, 2016, the U.S. Securities and Exchange Commission ("SEC" or the "Commission") reaffirmed its commitment to its whistleblower program by issuing the second largest award in its five-year history. While admittedly less dramatic than this $22 million payment, however, the Commission's recent enforcement activity is similarly compelling evidence of the value that the agency places on its whistleblower program. Specifically, on August 10 and August 16, 2016, the Commission announced settlements with two companies based on language in employee severance agreements that discouraged employees from reporting possible securities law violations to the SEC, including by restricting the employees' ability to seek a monetary award from the SEC. These settlements reflect the Commission's broad interpretation of the whistleblower protection provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") and its continuing focus on internal