Compliance Newsflash – November 29, 2017

November 30, 2017

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Supreme Court Wrestles With Whistleblower Protection Issue
On November 28, 2017, The Washington Post reported that the Supreme Court seemed reluctant to broadly apply whistleblower protections passed by Congress following the 2008 financial crisis, suggesting those particular protections only apply to people who report problems to the government. The question the justices were wrestling with involves the Dodd-Frank Act, which Congress passed to restrain banks from the kind of practices that many blamed for the 2008 financial crisis. Part of the law protects people who report legal violations to the U.S. Securities and Exchange Commission from being fired, demoted or harassed. The court is being asked to decide whether employees who report problems to their company’s management but not the commission also qualify for protections under the Dodd-Frank Act.
The Trump administration is arguing that they do qualify for protection, and the commission said the same in a 2011 rule. Businesses oppose that reading of the law.
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Wall Street’s Watchdog Is Pursuing Fewer Cases Since Trump Took Office
On November 23, 2017, The Washington Post reported that in 2013, Mary Jo White, a former federal prosecutor, announced that the Securities and Exchange Commission would be adopting a strategy once championed by Rudolph W. Giuliani in New York: “Broken windows,” the idea that addressing relatively small issues like vandalized panes of glass can deter larger misdeeds down the road. So over the next few years, the SEC pursued dozens of cases for small, technical transgressions with the goal of scaring off bigger infractions. “Minor violations that are overlooked or ignored can feed bigger ones, and, perhaps more importantly, can foster a culture where laws are increasingly treated as toothless guidelines,” White said at the time. Now, data shows that during the first months of the Trump administration, the agency may be scaling back those efforts.
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