Leahy Amendment Would Provide Whistleblower Protection While Holding SEC and CFTC Accountable If They Don’t Follow Up on Tips

A number of watchdog groups want Senate Banking Committee Chairman Chris Dodd (D-Conn.) to support an amendment to the financial regulatory reform bill that he is sponsoring. The bill lets the Securities and Exchange Commission and the Commodity Futures Trading Commission set up bounty programs for whistleblowers that approach them with information about financial fraud. However, if the government doesn’t act on these tips, the bill has two key provisions that prevent whistleblowers and the public from ever finding out. Leahy’s amendment would eliminate the provisions while protecting the identities of whistleblowers.

In a letter to Senator Dodd, the groups said that such limits on public access are “poison pill secrecy measures” that would not only prevent the public and whistleblowers from ever knowing whether the tips were pursued, but also would keep the latter from proving they are whistleblowers if they were ever retaliated against. The groups said that such secrecy would allow regulators to avoid being held accountable if they failed to act on any whistleblower tips.

The watchdog groups that support the amendment include Public Citizen, OMB Watch, the Project on Government Oversight, Citizens for Responsibility and Ethics in Washington, OpenTheGovernment.org, Government Accountability Project, Common Cause, Progressive States Network, Consumer Action, National Community Reinvestment Coalition, Americans for Financial Reform, and the National Fair Housing Alliance.

Related Web Resources:
S.3217 – Restoring American Financial Stability Act of 2010, OpenCongress.com
Read the groups’ letter to Senator Dodd (PDF)

Over the years, our stockbroker fraud lawyers have represented thousands of investors in their pursuit to recover their losses incurred as a result of securities fraud.