Not long ago at #DisruptionBanking, we brought you a story about how in May the SEC rewarded a whistleblower a total of $279 million. The previous largest reward had been $114 million. In the future these rewards may become even larger. Today we wanted to bring you news of a company that can help, if you are a whistleblower. HX5 Encrypted has been created to make sure that you don’t lose your whistleblower’s reward. In today’s story we will show you how it works. And explore some of the recent updates.
The Dodd-Frank Act in the United States plays a prominent role in how financial rewards for reporting misconduct are distributed. Under the Dodd-Frank Act, whistleblowers are incentivized to report financial misconduct and fraud. Legislation in the EU and the UK, as well as many other countries, also supports whistleblowers. But, for now, the big rewards are paid out in the U.S. for those reporting U.S. companies.
HX5 Encrypted recently unveiled the platform ‘Aranea’. Aranea helps organizations to communicate on issues that they might not know about normally. Stakeholders like the reporting person, the responder, the manager and finally the admin are there to help.
Essentials to know about Whistleblowing with HX5 Encrypted
‘Voluntary’ whistleblowing is one of the first things to know. This is when you independently report to media like us, government agencies, or other authorities before reporting to the Securities and Exchange Commission (SEC). This could disqualify a whistleblower from receiving rewards.
Whistleblowers are required to report to the SEC within 120 days after raising a problem within their organization. Failure to do so might make them ineligible for a reward.
Many companies are still getting used to the seriousness with which the SEC is taking whistleblowing. And the amount of solution providers offering support has also grown. Making it harder to ignore your obligations if you are a company.
Recent Whistleblowing News from Wall Street
Allegations that D.E. Shaw’s employment agreements contained language preventing whistleblowers from coming forward were in the news recently. The leading hedge fund agreed to pay the SEC a $10 million settlement.
It is common place in highly regulated industries to have strong contracts with existing and departing employees. But, in the case of D.E. Shaw, agreements used from the 2010s lacked the necessary carve-outs to exclude SEC whistleblowers.
Some departing employees of the hedge fund signed releases that attested they hadn’t filed a complaint against the company with any federal agency. Another consideration taken within the settlement.
D.E. Shaw have taken steps to rectify the problem. Others, like CBRE Group, have also had to settle with the SEC. The need to take whistleblowing seriously has never been more urgent then today.
We hope to bring you further news about this heightened area of attention soon. In the meantime, companies like HX5 Encrypted can be a good source of information. However, the Office of the Whistleblower on the main site of the SEC is still the best place to keep on top of ALL the nuances today.
Author: Andy Samu
See Also:
CFTC offers DeFi whistleblowers big bucks to expose fraud | Disruption Banking
How financial institutions can better understand the EU Whistleblower Directive | Disruption Banking
