SEC Warns In-House Attys Against Whistleblower Contracts

Law360, Washington (March 14, 2014, 5:16 PM EDT) -- Attorneys who draft contracts offering incentives for employees to keep alleged securities fraud whistleblower complaints in-house should think twice, the U.S. Securities and Exchange Commission’s whistleblower chief told lawyers on Friday, saying they may be disciplined for doing so.

At remarks before the Georgetown University Law Center Corporate Counsel Institute, the SEC's whistleblower chief, Sean McKessy, said he was keeping an eye out for creatively drafted contracts attempting to incentivize company whistleblowers from bringing alleged company wrongdoing to the agency’s attention.

“Be aware that this is something we are very concerned about. If you’re spending a lot of your time trying...

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