[Pages H5276-H5278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              WHISTLEBLOWER PROTECTION REFORM ACT OF 2019

  Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 2515) to amend the Securities and Exchange Act of 1934 to 
amend the definition of whistleblower, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2515

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Whistleblower Protection 
     Reform Act of 2019''.

     SEC. 2. WHISTLEBLOWER.

       Section 21F of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u-6) is amended--
       (1) in subsection (a)(6)--
       (A) by striking ``(6) Whistleblower.--The term'' and 
     inserting the following:
       ``(6) Whistleblower.--
       ``(A) In general.--The term''; and
       (B) by adding the following new subparagraph at the end:
       ``(B) Special rule.--Solely for the purposes of subsection 
     (h)(1), the term `whistleblower' shall also include any 
     individual who takes an action described in subsection 
     (h)(1)(A), or 2 or more individuals acting jointly who take 
     an action described in subsection (h)(1)(A).''; and
       (2) in subsection (h)(1)(A)--
       (A) in clause (ii), by striking ``or'' at the end;
       (B) in clause (iii), by striking the period at the end and 
     inserting ``; or''; and
       (C) by adding at the end the following:
       ``(iv) in providing information regarding any conduct that 
     the whistleblower reasonably believes constitutes a violation 
     of any law, rule, or regulation subject to the jurisdiction 
     of the Commission to--

       ``(I) a person with supervisory authority over the 
     whistleblower at the whistleblower's employer, where such 
     employer is an entity registered with or required to be 
     registered with the Commission, a self-regulatory 
     organization, or a State securities commission or office 
     performing like functions; or
       ``(II) such other person working for the employer described 
     under subclause (I) who has the authority to investigate, 
     discover, or terminate misconduct.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Ms. Waters) and the gentleman from Kentucky (Mr. Barr) each 
will control 20 minutes.
  The Chair recognizes the gentlewoman from California.

[[Page H5277]]

  

  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  I thank Representative Green, the chairman of the Subcommittee on 
Oversight and Investigations, for working with the gentleman from 
Michigan (Mr. Huizenga) to craft this timely piece of legislation to 
ensure that all whistleblowers reporting suspected securities law 
violations are protected from retaliation by their employers.
  In the Dodd-Frank Act, Congress provided the Securities and Exchange 
Commission the authority to reward whistleblowers who voluntarily 
provide the SEC with original information that leads to a successful 
enforcement action with monetary sanctions exceeding $1 million.

                              {time}  1700

  Realizing that these whistleblowers may be deterred by their 
employers, Congress also required the SEC to issue regulations to 
protect them from retaliatory efforts, such as firing or demotion; but 
in 2018, the Supreme Court held that whistleblowers who report alleged 
misconduct internally but not to the SEC are not protected by the 
antiretaliation provisions of Dodd-Frank. This is not what Congress 
intended. Indeed, requiring whistleblowers to race to the SEC in order 
to be protected discourages them from reporting their suspicions to 
their superiors.
  The U.S. Chamber of Commerce highlighted the importance of internal 
reporting in its 2010 letter to the SEC, stating: ``The experience of 
the many companies with robust internal reporting programs, as well as 
the empirical evidence, demonstrate that all stakeholders benefit when 
those with knowledge of potential securities law violations report 
internally, thus enabling management to promptly investigate and take 
remedial action.''
  By clarifying that whistleblowers who only report alleged misconduct 
to the employers are also protected by the antiretaliation provisions 
in the Dodd-Frank Act, this bill would encourage employees to 
communicate potential securities law violations to their employers 
without fear of being fired before they are able to report to the SEC.
  Again, I thank Chairman Green and Mr. Huizenga for pushing this 
important bill, and I urge my colleagues to join me in supporting it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BARR. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 2515, the Whistleblower Protection Reform 
Act of 2019.
  I would like to thank my colleagues, Congressman Green and 
Congressman Huizenga, for their work on this commonsense, bipartisan 
legislation.
  Mr. Speaker, whistleblowers play a very important role in rooting out 
bad behavior that harms the market as well as mom-and-pop investors. 
Additionally, businesses have a self-interest in detecting and 
eliminating illegal activity as swiftly as possible within their 
organizations. To that end, clarifying the concept of encouraging 
employees to report alleged securities fraud activities to their 
employers without fear of retaliation just makes simple common sense.
  Businesses typically strive to comply with the law, and they have 
incentives to do so from market pressures, but it is also because 
unlawful activity hurts the company itself and it hurts its investors, 
driving down the company's value, tarnishing the company's reputation, 
repelling business partners and customers, and damaging the overall 
marketplace. That is why, frankly, the vast majority of actors in the 
private sector do the right thing.
  For these reasons, many companies have implemented strong internal 
reporting measures to detect and mitigate potential wrongdoing before 
harm spreads. But if internal whistleblowers who report potential 
securities law violations internally are not protected from 
retaliation, what good are these internal reporting systems that these 
companies have voluntarily established?
  That notion might seem counterintuitive, but last year, in the 
Digital Realty Trust case, the Supreme Court held that the 
whistleblower antiretaliation protections of the Dodd-Frank Act do not 
extend to internal whistleblowers; only those who report to the SEC are 
protected from retaliation.
  Now, this is not an error in the Supreme Court's judgment; it is 
simply a faithful interpretation of the flawed drafting of the Dodd-
Frank law. This bill solves this problem by amending section 922 of 
Dodd-Frank to clarify that whistleblowers who report alleged misconduct 
internally with their employers but not to the SEC are protected by 
Dodd-Frank's antiretaliation provisions.
  By clarifying that Dodd-Frank's antiretaliation protections also 
apply to internal whistleblowers, this bill addresses the Supreme 
Court's interpretation and aligns Dodd-Frank's whistleblower 
protections with other major whistleblower laws.
  Again, I want to thank Congressman Green and Congressman Huizenga for 
this important bipartisan legislation, which I proudly support. I urge 
all of my colleagues to join me in supporting H.R. 2515.
  Mr. Speaker, I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Texas (Mr. Green), the chairman of the Subcommittee on 
Oversight and Investigations and the sponsor of H.R. 2515.
  Mr. GREEN of Texas. Mr. Speaker, I am honored to present this 
legislation, but I am more honored to acknowledge something that is 
exceedingly important.
  The chairwoman of the committee, the Honorable Maxine Waters, has, 
under her leadership in this Congress, produced many pieces of 
bipartisan legislation. This is but a continuation of her legislative 
record. I want to commend her for her efforts, and I would also like to 
salute Mr. McHenry and the persons who are across the aisle for their 
efforts, as well, in producing bipartisan legislation.
  I thank Mr. Barr for his assistance and his help. He is the Oversight 
ranking member, and he and I will be working together on many pieces of 
legislation.
  I am honored today to say that this piece of legislation was born as 
a result of honorable intentions metamorphosing into unintended 
consequences, honorable intentions.
  When we passed Dodd-Frank in 2010, we sought to add additional 
protections for whistleblowers above and beyond what was accorded in 
Sarbanes-Oxley. In so doing, with the best of intentions, we found that 
this legislation was taken before the Supreme Court of the United 
States of America, and the Supreme Court concluded--and I don't quarrel 
with their conclusion, but the Supreme Court concluded that the 
legislation would apply only if the person who was a whistleblower took 
the concern to the SEC first.
  I don't quarrel with what the Supreme Court ruled. This is why we 
have this piece of legislation to correct the best of intentions that 
metamorphosed into unintended consequences.
  Let's talk for just a moment about whistleblowers.
  It is exceedingly important to do this because I want people to know 
that whistleblowers are extraordinary people in the sense only of they 
do extraordinary things. They are really ordinary people, but they do 
extraordinary things.
  These are the people who are willing to put their livelihoods on the 
line. These are the people who are willing to take that step that many 
of us would not take because, when you take that step as a 
whistleblower, you will sometimes stand alone. But they understand that 
it is better to stand alone than never to stand at all, and in so 
doing, they are protecting us: consumers, members of the public.
  So I commend the whistleblowers of the world who take these 
extraordinary steps.
  But we also want to do more than commend them. We want to protect 
them. This legislation will protect those who are willing to step 
forward, those who will see something and say something, something that 
we encourage people to do.
  You can't encourage people to see something and say something and 
then allow them to do this without the protections that we should 
properly accord them and that we intended to accord them under Dodd-
Frank. So I am honored today to have this piece of legislation that 
will give whistleblowers the protection that we intended and will also 
send a message that the companies that they work for can have the

[[Page H5278]]

opportunity to take corrective action before the SEC is informed.
  Many of these companies want to do the right thing, and if given the 
opportunity, they will--not all, many. I think we ought to give them an 
opportunity to do the right thing; and to do so, we would want 
whistleblowers to report internally before they take this to an 
external source such as the SEC.
  Mr. Speaker, this legislation is bipartisan. I am honored to tell you 
that, among the persons who are the cosponsors, we have the Honorable 
Carolyn Maloney; the Honorable Representative Gerald Connolly; the 
Honorable   Gregory Meeks; the Honorable Joyce Beatty, who is here in 
this room with us currently; and the Honorable Vicente Gonzalez, all of 
whom support it, along with the Honorable Emanuel Cleaver.
  I would also add, it is endorsed by the National Whistleblower 
Center, endorsed by the North American Securities Administrators 
Association, endorsed by Public Citizen, endorsed by the Government 
Accountability Project, endorsed by the Project On Government 
Oversight, and endorsed by the Securities Industry and Financial 
Markets Association.
  It is another example of how, under the leadership of the Honorable 
Maxine Waters, we continue to produce bipartisan legislation. I am 
honored, Mr. Speaker, to have this honorable chairwoman presiding 
today.
  Mr. BARR. Mr. Speaker, I yield myself the balance of my time, and I 
am prepared to close.
  Mr. Speaker, again, I would thank Congressman Green and Congressman 
Huizenga for their leadership on this extending of whistleblower 
protections, and I yield back the balance of my time.


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their 
remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. WATERS. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, this is a very important measure that will increase 
corporate accountability and help those companies committed to 
ferreting out wrongdoing to take action without government involvement 
and protects those workers who help them to do so.
  I commend the gentleman from Texas and the gentleman from Michigan 
for working in a bipartisan manner to bring this bill before the House.
  Mr. Speaker, I urge my colleagues to join me in supporting this 
important piece of legislation, and I yield back the balance of my 
time.
  Mr. HUIZENGA. Mr. Speaker, I rise today in support of H.R. 2919, the 
Whistleblower Protection Reform Act of 2019.
  Whistleblowers are an effective means of rooting out bad behavior 
that harms the market as well as investors.
  In fact, Section 922 of Dodd-Frank amended the Securities and 
Exchange Act of 1934 to afford whistleblowers protection from 
retaliation by their employers for reporting suspected misconduct.
  Additionally, Section 922 allows for the SEC to provide monetary 
awards to whistleblowers who provide ``original information'' resulting 
in monetary sanctions over $1 million.
  However, in February 2018, the Supreme Court held in Digital Realty 
v. Somers that whistleblowers who report alleged misconduct internally 
to their employer, as opposed to the SEC, are not protected by Dodd-
Frank's anti-retaliation provisions.
  A whistleblower who reports directiy to their employee about alleged 
misconduct shouldn't risk being retaliated against. That's why this 
bipartisan bill has been carefully crafted to clarify the application 
of the anti-retaliation provisions to whistleblowers provided within 
the Dodd-Frank Act.
  By further clarifying the anti-retaliation provisions of section 922 
apply to those whistleblowers who report internally will encourage 
employees to report potential misconduct instead of automatically 
escalating the issue to the SEC.
  Internal reporting may be more efficient and practical in some cases 
as employers have a chance to correct, self-report, or take other 
action.
  Moreover, by clarifying the application of Dodd-Frank anti-
retaliation protections to internal whistleblowers, the bill aligns 
with similar protections for internal whistleblowers within the 
Whistleblower Protection Act and Sarbanes-Oxley.
  I'd like to thank my colleague, Mr. Green for working with me on the 
Whistleblower Protection Reform Act and I urge my colleagues to vote 
yes.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Waters) that the House suspend the 
rules and pass the bill, H.R. 2515, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________