On May 25, 2011, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) approved its final rules (“Whistleblower Rules”) to implement the whistleblower award program of Section 21F of the Securities Exchange Act of 1934, which was added by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The Whistleblower Rules establish the standards and procedures the SEC will apply in awarding whistleblowers monetary compensation for providing tips about possible securities law violations that lead to successful SEC enforcement actions and make definitions which set the contours for protections of whistleblowers under the Dodd-Frank Act’s anti-retaliation provisions. The SEC’s press release is available here: SEC Adopts Rules to Establish Whistleblower Program. A copy of the adopting release and the Whistleblower Rules is available here: Final Rules.[1]
Archives for May 2011
The SEC Uses an FCPA Case for Its First-Ever Deferred Prosecution Agreement
On May 17, 2011, the U.S. Securities and Exchange Commission ("SEC") announced its first deferred prosecution agreement ("DPA"). The DPA was with Luxembourg-based Tenaris S.A., a global steel pipe manufacturer and supplier for the energy industry, to resolve alleged violations of the Foreign Corrupt Practices Act ("FCPA").[1] Tenaris, founded in Argentina, is a foreign private issuer with American Depository Shares ("ADSs") listed on the New York Stock Exchange. Tenaris agreed to pay $4.79 million in disgorgement plus $641,900 in prejudgment interest. Separately, Tenaris resolved a parallel investigation by the U.S. Department of Justice ("DOJ") by entering into a separate non-prosecution agreement ("NPA") and agreeing to pay $3.5 million in fines. The settlement is significant because it is the SEC’s first use of a DPA since it announced its Cooperation Initiative last year.