The SEC Brings Its First Enforcement Action Involving Confidentiality Provisions That Have the Potential to Silence Employees From Reporting Suspected Misconduct to the SEC
On April 1, 2015, the Securities and Exchange Commission (“SEC”) announced a settled administrative cease-and-desist proceeding against technology and engineering firm KBR, Inc. (“KBR”) for what the SEC described as the company’s “improperly restrictive” confidentiality agreements that allegedly violated the whistleblower protection rules adopted as part of the Dodd-Frank whistleblower bounty program. Specifically, the SEC alleged that KBR violated Rule 21F-17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).