‘We Want a System That Works, Not a System of Gotcha,’ Hirschmann Says
WASHINGTON, D.C.—The U.S. Chamber of Commerce today expressed serious concerns over the SEC’s proposed whistleblower rules, warning that the new program threatens to undermine existing corporate compliance programs that the federal government has long advocated as an important component of responsible and effective corporate governance.
“Instead of allowing companies to identify and fix problems, we are just creating a lottery,” said David Hirschmann, president and CEO of the U.S. Chamber’s Center for Capital Markets Competitiveness. “This bounty program creates incentive for employees to become amateur sleuths in search of a big payday. We want a system that works, not a system of gotcha.”
As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC entitles whistleblowers to an award valued between 10% and 30% of the sanctions imposed in federal securities law enforcement actions that result in at least $1 million in sanctions. Under Sarbanes Oxley, whistleblowers were not provided with a financial award.
“The SEC has long advocated for corporate compliance programs, but this whistleblower bounty program would essentially eviscerate them,” Hirschmann said. “Our suggestion is to create a system where regulators work with the robust compliance programs already in place to best protect from corporate wrongdoing. We urge the SEC to study the potentially devastating consequences of this rule on businesses and to work with shareholders to create a manageable system.”
Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
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