[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5485 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 5485
To amend the Securities Exchange Act of 1934 to expand the definition
of whistleblower and increase anti-retaliation protections for
whistleblowers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 5, 2021
Mr. Green of Texas introduced the following bill; which was referred to
the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to expand the definition
of whistleblower and increase anti-retaliation protections for
whistleblowers, and for other purposes.
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 2021''.
SEC. 2. WHISTLEBLOWER PROTECTION ENHANCEMENTS.
(a) In General.--Section 21F of the Securities Exchange Act of 1934
(15 U.S.C. 78u-6) is amended--
(1) in subsection (a)--
(A) in paragraph (4)--
(i) by striking subparagraph (A) and
inserting the following:
``(A) any monies, including penalties,
disgorgement, and interest, ordered to be paid or
otherwise ordered as relief, including in--
``(i) a non-prosecution agreement entered
by the Attorney General;
``(ii) a deferred prosecution agreement
entered by the Attorney General; and
``(iii) an agreement entered by the
Commission to settle a covered judicial or
administrative proceeding; and'';
(ii) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) any monies recovered by a bankruptcy trustee
as a result of the original information provided by a
whistleblower.''; and
(B) in paragraph (6)--
(i) by striking ``(6) whistleblower.--The
term'' and inserting:
``(6) Whistleblower.--
``(A) In general.--The term''; and
(ii) by adding at the end the following:
``(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 two or more individuals acting
jointly who take an action described in subsection
(h)(1)(A), including as part of the job duties of such
individual or individuals.'';
(2) in subsection (b), by adding at the end the following:
``(3) Related actions.--When determining whether to pay an
award to a whistleblower in a related action, the Commission
may not consider whether another whistleblower reward program
has a more direct or relevant connection to such related action
based on information provided by such whistleblower.'';
(3) in subsection (c)(1)(B)(ii), by striking ``the balance
of the Fund'' and inserting ``the balance of the Investor
Protection Fund or the amount of the potential award'';
(4) in subsection (g)(2)--
(A) in subparagraph (A), by striking ``and'' at the
end;
(B) in subparagraph (B), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(C) funding the operations of the Securities
Exchange Commission Office of the Whistleblower.'';
(5) in subsection (h)(1)--
(A) in subparagraph (A)--
(i) by striking ``, directly or
indirectly,'';
(ii) by striking ``discharge,'' and
inserting ``directly or indirectly discharge'';
(iii) by striking ``employment'' and
inserting ``employment or post-employment'';
(iv) in clause (i), by striking ``to the
Commission'' and inserting ``to the Commission
orally or in writing'';
(v) in clause (ii), by striking ``or'' at
the end;
(vi) in clause (iii)--
(I) by striking ``that are required
or protected under'' and inserting
``with respect to any conduct that the
whistleblower reasonably believes
evidences a violation of or is
protected under''; and
(II) by striking the period at the
end and inserting ``; or''; and
(vii) by adding at the end the following:
``(iv) in providing information regarding
any conduct that has occurred, is ongoing, or
is about to occur that the whistleblower
reasonably believes constitutes a violation of
any law, rule, or regulation subject to the
jurisdiction of the Commission--
``(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.'';
(B) in subparagraph (B)--
(i) by adding at the end the following:
``(iv) Jury.--Each party to an action
brought under subsection (h) of this section
shall be entitled to a trial by jury.
``(v) Burdens of proof.----
``(I) In general.--With respect to
any complaint filed under this
paragraph by a whistleblower against an
employer, a whistleblower shall prevail
in the action upon a showing that
protected conduct was a contributing
factor in the unfavorable personnel
action alleged in the complaint.
``(II) Establishment of
contribution factor.--A whistleblower
may establish that the protected
conduct was a contributing factor in
the personnel action through
circumstantial evidence, including
evidence that--
``(aa) the official that
took the personnel action knew
of the protected conduct
engaged in by the
whistleblower; and
``(bb) the official that
took the personnel action did
so within a period of time such
that a reasonable person could
conclude that the protected
conduct engaged in by the
whistleblower was a
contributing factor in the
personnel action.''; and
(ii) in clause (iii)(I)(bb), by striking
``3'' and inserting ``6''; and
(C) in subparagraph (C)--
(i) in clause (ii), by striking ``and'' at
the end;
(ii) by striking clause (iii) and inserting
the following:
``(iii) the payment of compensatory
damages, including compensation for litigation
costs, expert witness fees, and reasonable
attorneys' fees; and''; and
(iii) by adding at the end the following:
``(iv) any other appropriate remedy as
determined by the Board with respect to the
conduct that is the subject of the
complaint.''; and
(6) by adding at the end the following:
``(k) Nonenforceability of Certain Provisions Waiving Rights and
Remedies or Requiring Arbitration.--
``(1) In general.--The rights and remedies provided under
this section may not be waived by any agreement, policy form,
or condition of employment, including by a predispute
arbitration agreement.
``(2) Predispute arbitration agreement.--If a predispute
arbitration agreement requires arbitration of a dispute arising
under this section such predispute arbitration agreement is not
valid or enforceable.
``(3) Effective date.--This subsection shall be effective
with respect to any action or agreement that is filed on or
after, or that is pending as of, the date of enactment of this
Act.''.
(b) Timely Processing of Claims.--
(1) In general.--Section 21F(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78u-6(b)) is amended by adding at the
end the following:
``(3) Timely processing of claims.--
``(A) Initial disposition.--
``(i) In general.--Except as provided in
subparagraph (B), the Commission shall make an
initial disposition with respect to any claim
timely submitted by a whistleblower for an
award under this section not later than 1 year
after the submission deadline established by
the Commission, by rule, for a whistleblower to
file a claim.
``(ii) Multiple actions.--If a claim
submitted by a whistleblower for an award under
this section involves 1 or more related
actions, the requirement described in clause
(i) shall apply with respect to the latest of
the submission deadlines applying to such
claims.
``(B) Exceptions.--
``(i) Initial extension.--If the Director
of the Division of Enforcement of the
Commission (in this paragraph referred to as
the `Director'), determines that a claim is
sufficiently complex or involves more than one
whistleblower, or if other good cause exists
such that, as determined by the Director, the
Commission cannot reasonably satisfy the
requirements described in subparagraph (A), the
Director may, after providing notice to the
Commission, extend the submission deadline
established by the Commission for a
whistleblower to file a claim as it applies to
such by not more than 180 days.
``(ii) Additional extensions.--If, after
providing an extension under clause (i), the
Director determines that the Commission cannot
reasonably satisfy the requirements under
subparagraph (A) with respect to an award
claim, as extended under clause (i), the
Director may, after providing notice to the
Commission, extend the period in which the
Commission may satisfy subparagraph (A) by 1
additional 180 days.
``(iii) Notice to whistleblower required.--
If the Director exercises the extension
authority described under clause (i) or clause
(ii), the Director shall submit to the
whistleblower that filed the award claim that
is subject to that extension action by the
Director with a written notification of such
extension action by the Director or the
designee.''.
(2) Rules.--The Securities and Exchange Commission shall,
not later than one year after the date of the enactment of this
Act, issue such rules as the Securities and Exchange Commission
determines necessary to carry out section 21F(b)(3) of the
Securities Exchange Act of 1934.
(c) Effective Date.--Except as otherwise provided, the amendments
made by this Act shall apply with respect to any claim involving a
violation of section 21F(h)(1) of the Securities Act of 1934, including
any claim in an enforcement action or proceeding brought by the
Securities and Exchange Commission that is pending in any appropriate
judicial or administrative forum on the date of the enactment of this
Act.
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