Jordan A. Thomas comments on the current state of whistleblower protections enforced by the SEC

Whistleblowing has been on the increase since the 2007-08 financial crisis sparked a crackdown on corporate corruption and collusion. The number of tips received by the “Whistleblower Office” of America’s Securities and Exchange Commission (SEC) has risen steadily since it was opened in 2011, to nearly 4,000 a year. “We live in the age of the whistleblower,” says Jordan Thomas, a former SEC official now at Labaton Sucharow, a law firm. Surveys by the Association of Certified Fraud Examiners, a global group for financial sleuths, consistently find tips to be the leading mechanism for unearthing wrongdoing, well ahead of audits or regulatory reviews./p>

In one survey almost a fifth of respondents felt their employer’s confidentiality policies obstructed the reporting of potentially illegal activity to law enforcers.

In America, such agreements are legal unless they are designed to stifle whistleblowing, as opposed to, say, protecting trade secrets. The SEC considers this area a priority and this year brought its first cases against firms deemed to have gagged or retaliated against workers. Among those fined was KBR, an engineering group, for making staff sign agreements which said they could be sacked if they discussed an internal investigation with outside parties without the firm’s approval. “The SEC has sent a strong message about restrictive language. It isn’t messing around,” says Mr Thomas. But Mr Devine fears that companies are growing more creative in how they craft agreements to sidestep restrictions. “If there’s one thing I’ve learnt in over 30 years, it’s that it is fatal for whistleblowers’ legal rights to remain static,” he says.