The US Securities and Exchange Commission (SEC) reached settlements with seven companies, totaling more than $3 million, for violating rules designed to protect whistleblowers, the regulator said on Monday (Sep 9).
SEC said the companies impeded whistleblowers from reporting potential securities law violations by requiring employees to waive their right to possible monetary rewards, breaking whistleblower protection Rule 21F-17(a).
Each of the firms agreed not to violate this rule in the future and have taken steps to remediate the violations, it added.
“Ensuring that potential whistleblowers can communicate directly with the Commission is a critical part of the SEC’s oversight mandate,” said Creola Kelly, chief of the SEC’s office of the whistleblower.
TransUnion agreed to pay US$312,000 and Acadia Healthcare Company will pay US$1.39 million in connection with the settlements the SEC disclosed on Monday.
The firms were each charged in connection with employment, separation or other agreements that violated a rule that prohibits any actions to impede individuals communicating with the regulator directly about possible violations of securities laws, the SEC said in its statement.
They have all worked towards remediation, including changing the agreements at issue, the SEC said.
The other penalties were as follows:
- Brands Holding Corp. agreed to pay a US$399,750 civil penalty
- AppFolio agreed to pay a US$692,250 civil penalty
- IDEX Corporation agreed to pay a US$75,000 civil penalty
- LSB Industries agreed to pay a US$156,000 civil penalty
- Smart for Life agreed to pay a US$19,500 civil penalty
