SEC Says Confidentiality Agreements May Impede Whistleblowers

On April 1, 2015, the United States Securities and Exchange Commission filed its first enforcement action under Section 21F of the Securities Exchange Act of 1934 and Exchange Act Rule 21F-17 promulgated thereunder, which is intended to prevent issuers from taking steps that impede employees from reporting potential federal securities law violations to the SEC. In a settled administrative proceeding, the Commission alleged that KBR, Inc. required employees, during internal investigation interviews, to sign a confidentiality statement containing "improperly restrictive language" that could be read to discourage employees from reporting potential violations of the federal securities laws to the SEC.



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