In the ever-evolving landscape of securities regulation, it is crucial for investment adviser firms registered with the United States Securities and Exchange Commission (“SEC”) to stay vigilant and informed about current enforcement actions. A recent cease-and-desist proceeding instituted by the SEC against a clean energy company has sent a clear message regarding whistleblower protections and the use of severance agreements. As a result, we’ll explore the implications of this enforcement action and how it relates to investment adviser firms in light of SEC Rule 21F-17.
October 27, 2011
For registered investment advisors, 2011 gave way to many changes as various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) became effective. Understanding the changes made over this past year may help to confirm that your investment advisor is in compliance with the recent regulatory changes. Below is a brief overview of some of the regulatory changes that occurred during this past year.
Bank of America Whistleblower Judgment Highlights the Need for Investment Advisers to Have Whistleblower Policies and Procedures in Place
September 22, 2011
The Department of Labor recently required Bank of America to rehire and pay $930,000 to an employee who was fired for whistleblowing. The employee had been leading an internal investigation looking into wire, mail and bank fraud at Countrywide Financial, which merged with Bank of America in 2008. Shortly after the two companies merged, the employee was fired. The employee then filed a Sarbanes-Oxley claim alleging she was fired due to the internal investigation.
August 09, 2011
In a recent speech, Robert Khuzami, the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission (“SEC”), discussed the SEC’s new whistleblower program and the role internal investigations will play.
April 20, 2011
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the United States Securities and Exchange Commission (“SEC”) can compensate whistleblowers if they provide original information about a securities law violation. Further, the Dodd-Frank Act gives whistleblowers protection from employer retaliation for making disclosures that are required under all rules, laws, and regulations subject to the SEC’s jurisdiction.
Investment Advisers Should Update Supervisory Procedures to Address Internal Whistleblower Complaints
October 19, 2010
Michael Loscalso, a former manager for Ameriprise Financial Inc. (“Ameriprise”), who was fired in November of 2009, has brought a suit against the company alleging his employment was wrongfully terminated when he raised concerns to company management about violations of the rules and regulations of the United States Securities and Exchange Commission (“SEC”).
The Dodd-Frank Wall Street Reform and Consumer Protection Act Gives Additional Incentives and Protections to Whistleblowers
August 19, 2010
On July 23, 2010, the United States Securities and Exchange Commission (“SEC”) awarded $1 million to two individuals who provided crucial information and documents that led to the SEC’s insider trading cases against Pequot Capital. The award was the largest paid by the SEC for information in an insider trading case. However, a provision in the recently enacted Dodd-Frank Wall Street Reform and Consumer Protect Act (“Dodd-Frank Act”) gives the SEC authority to further reward whistleblowers.