An article by William McLucas, Harry Weiss, Matthew Martens, Thomas White, Arian June and Elizabeth Skey, published in the September 19, 2016 issue of Bloomberg BNA's Securities Regulation & Law Report, explores two settlements providing the latest examples of the SEC's continued focus on employee confidentiality provisions and the agency's broad application of the whistleblower protection rules.
The Securities and Exchange Commission (SEC) recently announced settlements with two companies for using severance agreements that allegedly violated Rule 21F-17. [Order Instituting Cease-And-Desist Proceedings, In the Matter of BlueLinx Holdings, Inc., No. 3-17371 (SEC Aug. 10, 2016) (BlueLinx Order).] Rule 21F-17 provides that ''[n]o person may take any action to impede an individual from communicating directly with the [SEC] staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.'' [17 C.F.R. § 240.21F-17(a).] The rule is part of the SEC's whistleblower program, which provides significant monetary incentives to individuals in exchange for information regarding potential securities violations. Read the full article