The SEC announced on Wednesday that BlueLinx Holdings Inc. has agreed to pay a $265,000 penalty for including a provision in its severance agreements that required outgoing employees to waive their rights to monetary recovery if they filed a charge or complaint with the SEC or other federal agencies. Press Rel. No. 2016-157. According to the SEC’s order, approximately 160 BlueLinx employees have signed severance agreements that contained the provision since it was added to all of BlueLinx’s severance agreements in or about June 2013.
The provision violates Rule 21F-17 of the Exchange Act, which became effective on August 12, 2011, and prohibits any action to impede an individual from communicating with the SEC about a possible securities law violation. The purpose of the adoption of Rule 21F-17 was “to encourage whistleblowers to report possible violations of the securities laws by … Read More »
The SEC announced yesterday that it has awarded $17 million to a former company employee whose tip substantially advanced the SEC’s investigation and enforcement proceeding. Press Rel. No. 2016-114. The award is the second largest award by the SEC to a whistleblower since the inception of its whistleblower program nearly five years ago, trailing behind a $30 million award announced in September 2014.
No details on the underlying enforcement action have been released, but the action can be expected to bring in between $56 million and $170 million because the SEC awards whistleblowers 10 to 30 percent of the sanctions it secures. In determining the award percentage, the SEC considers the following factors:
(i) the significance of the information provided by the whistleblower; (ii) the degree of assistance provided by the whistleblower in the enforcement action or related actions; (iii) … Read More »
Two Companies Avoid FCPA Charges through NPAs that Underscore the Value of Self-Reporting and Cooperation with the SEC
The SEC announced two non-prosecution agreements on June 7, 2016 that companies entered into to avoid charges related to the payment of bribes to Chinese officials by their foreign subsidiaries. Press Rel. No. 2016-109. Pursuant to the NPAs, each company will forfeit gains related to the bribes, but the NPAs stipulate that the companies are not charged with violations of the FCPA and will not pay additional monetary penalties.
The SEC’s announcement of the NPAs emphasizes the value the staff put on the companies’ promptly self-reporting the misconduct, cooperating with the SEC, and quickly taking corrective action. The NPAs identified several actions taken by each company that weighed in their favor, including: (i) reporting to the SEC during their internal investigations; (ii) sharing detailed findings of the investigations and updating enforcement staff regarding new information; (iii) providing summaries of witness interviews … Read More »