Industry Proposals Would Gut Wall Street Whistleblower Programs, Undermine SEC, CFTC Investigations

Groups representing the rights of consumers, investors, taxpayers, employees, and whistleblowers urged the House Committee on Financial Services today to oppose a draft bill by Rep. Michael Grimm (R-N.Y.) that would silence would-be Wall Street whistleblowers.

Grimm’s proposal would undermine investigations and hamstring the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission, according to a letter signed by 22 organizations, including the Project On Government Oversight (POGO), the Government Accountability Project, Taxpayers Against Fraud, Americans for Financial Reform (a coalition of more than 250 national and state organizations working together for strong Wall Street reform), and the Taxpayer Protection Alliance.

If passed, Grimm’s bill would undo many of the whistleblower protections called for in the Dodd-Frank financial reform legislation that was passed last year.

In the letter, the groups state:

The Grimm draft bill would gut the whistleblower programs before they begin, and resembles the proposals made by industry without consideration for the stakeholders the whistleblower rules are designed to protect: investors and taxpayers.

The SEC Commissioners are scheduled to vote on their final rule implementing the Dodd-Frank whistleblower program this Wednesday morning.

“We hope that the SEC Commissioners and Congress will not be persuaded by the self-serving industry proposals to weaken the program which are embodied in the Grimm draft bill,” said Angela Canterbury, POGO’s director of public policy. “Instead, we urge the SEC to put into place regulations that create the most effective whistleblower program to best incentivize whistleblowers and serve investors and taxpayers.”

Groups Oppose Industry Proposals to Gut the SEC and CFTC Whistleblower Programs, May 24, 2011.