There are many aspects to enabling functional, effective internal reporting programs that certainly include the protection of those that report misconduct. This bill is potentially a step forward as "whistleblowers will be able to approach compliance officers directly with their misconduct allegations and still feel protected by Dodd-Frank’s whistleblower protections, without needing to report their concerns to the SEC first."
This bill has more teeth than H.R. 389, which I wrote about in March regarding the weaknesses of whistleblower incentives and protections:
"Another potential pitfall with H.R. 389 resides within the vagueness of protections identified for individuals that come forward. The non-detailed protections lie in stark contrast to the SEC’s program, most notably in that the Dodd-Frank Act specifically states that employers may not retaliate against an individual who provides information to or assists the SEC. The SEC also applies strong confidentiality measures for whistleblowers, including information protection measures internal to the regulatory body itself.
Reward numerations and protections are most important to effective whistleblower programs because the persons that come forward often face severe personal and professional risk of doing so. The financial benefit and freedom from harassment and retaliation must be substantial enough to incentivize persons with information regarding criminal and corrupt activity to report it. Unfortunately, the Kleptocracy Asset Recovery Rewards Act in its current form may be severely limited in its intended effectiveness and reach."
Formally known as the Whistleblower Programs Improvement Act, the bill extends whistleblower protections to employees who provide misconduct allegations or related information to… (I) a person with supervisory authority over the whistleblower at the employer of the whistleblower, if that 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) another individual working for the employer described in subclause (I) who the whistleblower reasonably believes has the authority to — (aa) investigate, discover, or terminate the misconduct; or (bb) take any other action to address the misconduct. In other words, whistleblowers will be able to approach compliance officers with their misconduct allegations and still feel protected by Dodd-Frank’s whistleblower protections, without needing to report their concerns to the SEC first. Hallelujah.