Tariffs-Free Regulatory Importing?
Asad Akhtar
instance, the whistleblower disclosed to the SEC that trades were being entered into on the behalf
of a client to an affiliated broker-dealer counterparty, without initially obtaining the client’s
consent.56 Upon becoming aware of the SEC report, the SEC alleged that Paradigm engaged in
retaliatory actions that ultimately led to the whistleblower’s resignation. This included stripping
his title of a head-trader, omitting any supervisory responsibilities and assigning him to do lowlevel compliance work in an isolated location of the office.57
Restrictive Language in Agreements - KBR Inc.
In April 2015, the SEC brought its first enforcement action against a company using
restrictive language in confidentiality agreements to disrupt the SEC’s whistleblowing
program.58 The engineering firm KBR Inc. required employees to sign agreements during
certain internal investigations that prohibited them from discussing the matter with outside
parties, including regulatory authorities, without obtaining the consent of the company’s legal
department.59 The punishments for breaching this provision included discipline and potential
termination.60 The SEC found the company to be in violation of Rule 21F-17, taking any action
that may impede whistleblowers from reporting to the SEC, and KBR agreed to modify the
agreements and provide an exclusion for the SEC.61
C. Internal Compliance Eligibility
It has been argued by some litigants that for an employer to be constrained to the antiretaliation provisions under Section 21F, the whistle blower must report the securities law
56
Supra, note 54 at 3-4.
Supra, note 54 at 6-8.
58
File No. 3-16466 (April 1, 2015), online: SEC (cease-and-desist proceeding brought against KBR
Inc.).
59
Ibid at 2.
60
Ibid.
61
Supra, note 58 at 3.
57
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