In a letter filed with the House Financial Services Committee, ACC noted that it strongly supports draft legislation that would require employees to report internally, subject to limited exceptions. The SEC and CFTC have proposed rules that would permit employees to obtain bounties after reporting directly to the agencies themselves without apprising internal compliance officials of the alleged misconduct.
While ACC supports the draft legislation, it nonetheless requests a modification to draft legislation. This modification would give companies 180 days to address whistleblower allegations of misconduct prior to reporting them to the SEC. This would, as stated in the ACC letter, “usefully permit companies—and not the overwhelmed enforcement staff—to be the initial filter for meritless allegations”.
The ACC letter to the Committee attaches two comments letters ACC filed with the Securities Exchange Commission last December, the first of which was joined by 270 CLOs and Compliance Officers. Those prior letters spell out in detail the ACC view that SEC’s rules must safeguard the role of compliance and reporting programs to detect and resolve allegations of misconduct before they fester or mushroom.
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