(Photo by Spencer Platt/Getty Images) Getty ImagesThe US Securities and Exchange Commission’s recent fine and censure of Guggenheim Securities sent Wall Street a powerful reminder: Companies cannot prohibit or impede employees from contacting the SEC or any other regulator about potential securities law violations. The SEC has been vigilant about protecting whistleblowers and punishing companies that restrict the ability of whistleblowers to report securities law violations to the SEC through employment contracts, nondisclosure agreements, company policies or separation agreements. Guggenheim, the SEC said, prohibited employees from initiating contact with regulators without prior approval from Guggenheim’s legal or compliance department. The SEC also is bringing cases when investors – not just employees – are required to sign agreements that prohibit the investors from reporting securities law violations. The SEC has established a clear line for instances where companies might be impeding whistleblowers in any way.

Source: Forbes July 12, 2021 21:11 UTC