Dems fear Wall Street is silencing whistleblowers

Several House Democrats say they fear Wall Street is using confidentiality agreements to keep people from blowing the whistle on misconduct.

Eight House Democrats sent a letter Monday urging the Securities and Exchange Commission (SEC) to send a “strong message” that such agreements won’t be tolerated and consider “bringing enforcement actions if necessary.”

{mosads}”While there are legitimate reasons for companies to use confidentiality agreements to protect sensitive information, such agreements should be structured as narrowly as possible,” wrote the lawmakers. “Employees should also be clearly informed that these agreements in no way restrict their right to voluntarily report securities law violations to the Commission.”

The 2010 Wall Street Reform Law, commonly referred to as Dodd-Frank, created the Office of the Whistleblower Protection within the SEC to try to encourage people to step forward with information about wrongdoing in the financial sector.

The lawmakers said the office has seen success, and are concerned that those gains could be jeopardized by the confidentiality agreements.

“We are also concerned by a growing body of anecdotal evidence describing retaliation through litigation and on-the-job harassment, which if left unaddressed, will also deter future reporting of securities violations,” they wrote. 

Reps. Maxine Waters (Calif.) and Elijiah Cummings (Md.) — the top Democrats on the House Financial Services Committee and Oversight and Government Reform Committee, respectively — spearheaded the letter to SEC Chairwoman May Jo White.

Reps. Gwen Moore (D-Wis.), Jackie Speier (D-Cali.), Keith Ellison (D-Minn.), Tammy Duckworth (D-Ill.), Stephen Lynch (D-Mass.) and Matt Cartwright (D-Pa.) also signed the letter.