Last week, in a Benzinga.com article, “Let’s Not Step Backwards with Whistleblowing Provisions,” NACD President and CEO Ken Daly called for a cooling off period for the proposed Securities and Exchange Commission (SEC) whistleblower regulations to allow time for more discussions with regulators, shareholders, directors, and executives. These discussions could help create a more effective program.
The article emphasized the fact that more than 260 of the largest U.S. companies, including McDonald’s Corp., Gap Inc., GlaxoSmithKline PLC, and Google, Inc. have spoken out against the new rules. Specifically, these companies believe that the reward for reporting directly to the SEC, potentially in excess of $1 million dollars, will discourage whistleblowers from initially reporting through the internal lines of communication mandated by the Sarbanes-Oxley Act.
The article lists several other concerns with the proposed whistleblower rules. Many question whether the already strained SEC will be able to handle the expected flood of new whistleblower complaints. Furthermore, the proposed rules do not provide adequate punitive consequences for false allegations. This potential combination increases the probability that the agency will be unable to identify serious reports amidst piles of superfluous claims.
To read the article, visit http://www.benzinga.com/life/politics/11/03/960493/lets-not-step-backwards-with-whistleblowing-provisions.