[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4619 Introduced in House (IH)]

<DOC>






114th CONGRESS
  2d Session
                                H. R. 4619

  To strengthen incentives and protections for whistleblowers in the 
   financial industry and related regulatory agencies, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 2016

 Mr. Cummings introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committees on 
    Agriculture and the Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To strengthen incentives and protections for whistleblowers in the 
   financial industry and related regulatory agencies, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Whistleblower Augmented Reward and 
Nonretaliation Act of 2016'' or the ``WARN Act of 2016''.

SEC. 2. AMENDMENTS TO THE FINANCIAL INSTITUTIONS ANTI-FRAUD ENFORCEMENT 
              ACT OF 1990.

    (a) Rights of Declarants.--Section 2565(d) of the Financial 
Institutions Anti-Fraud Enforcement Act of 1990 (12 U.S.C. 
4205(d)(1)(A)) is amended--
            (1) in paragraph (1)(A)--
                    (A) by redesignating clause (ii) as clause (iii); 
                and
                    (B) by striking clause (i) and inserting the 
                following:
                            ``(i) Not less than 10 percent, in total, 
                        of what has been collected in any recovery 
                        imposed in the action or related actions.
                            ``(ii) Not more than 30 percent, in total, 
                        of what has been collected in any recovery 
                        imposed in the action or related actions.''; 
                        and
            (2) by adding at the end the following new paragraph:
            ``(3) Appeals.--Any determination regarding an award under 
        this section may, within 30 days of such determination, be 
        appealed to the appropriate court of appeals of the United 
        States.''.
    (b) Protection for Declarants.--The Financial Institutions Anti-
Fraud Enforcement Act of 1990 (12 U.S.C. 4212) is amended by striking 
section 2572 and inserting the following:

``SEC. 2572. PROTECTION FOR DECLARANTS.

    ``(a) Remedy.--In a civil action, a person may obtain all relief 
necessary to make such person whole if such person--
            ``(1) was discharged, demoted, suspended, threatened, 
        harassed, or in any other manner discriminated against in the 
        terms and conditions of employment by an employer because of 
        lawful acts done by the person on behalf of the person or 
        others in furtherance of a prosecution under section 215, 225, 
        287, 656, 657, 1001, 1005, 1006, 1007, 1014, 1032, 1341, 1343, 
        1344, or 1517 of title 18 (including provision of information 
        relating to, investigation for, initiation of, testimony for, 
        or assistance in such a prosecution); and
            ``(2) did not act without direction from his or her 
        employer to deliberately cause the violation disclosed.
    ``(b) Relief.--Relief under subsection (a) shall include--
            ``(1) reinstatement with the same seniority status;
            ``(2) twice the amount of back pay and interest that the 
        plaintiff would have had but for the discrimination; and
            ``(3) compensation for any special damages sustained as a 
        result of the discrimination, including litigation costs, 
        expert witness fees, and reasonable attorneys fees.
    ``(c) Burdens of Proof.--Complaints for relief shall be governed by 
the procedures, evidentiary standards, and burdens of proof in section 
1057 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(12 U.S.C. 5567).''.
    (c) Education.--Section 2573 of the Financial Institutions Anti-
Fraud Enforcement Act of 1990 (12 U.S.C. 4213) is amended--
            (1) by striking ``The Attorney General'' and inserting the 
        following:
    ``(a) In General.--The Attorney General''; and
            (2) by adding at the end the following:
    ``(b) Education.--The Attorney General shall issue regulations 
requiring every employer covered by this Act to provide education and 
training to its employees on the rights and remedies provided under 
this section, including through individual notice to its employees, 
posting information on its website homepage, and providing mandatory 
training for its employees.''.
    (d) Share of Assets.--Section 2580 of the Financial Institutions 
Anti-Fraud Enforcement Act of 1990 (12 U.S.C. 4225) is amended by 
striking subsection (c) and inserting the following:
    ``(c) Share of Assets.--When the United States recovers any asset 
or assets specifically identified in a valid declaration filed under 
section 4221 of this title and the Attorney General determines that the 
asset or assets would not have been recovered if the declaration had 
not been filed, the declarant shall have the right to share in the 
recovery in the amount of--
            ``(1) not less than 10 percent, in total, of what has been 
        collected in any recovery imposed in the action or related 
        actions; and
            ``(2) not more than 30 percent, in total, of what has been 
        collected in any recovery imposed in the action or related 
        actions.''.
    (e) Review of Action by Attorney General.--The Financial 
Institutions Anti-Fraud Enforcement Act of 1990 (12 U.S.C. 4228) is 
amended by striking section 2583 and inserting the following:

``SEC. 2583. REVIEW OF ACTION BY THE ATTORNEY GENERAL.

    ``Any determination regarding an award under this chapter may, 
within 30 days of such determination, be appealed to the appropriate 
court of appeals of the United States.''.

SEC. 3. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

    (a) Employees of Depository Institutions and Banking Agencies.--
Section 33(a) of the Federal Deposit Insurance Act (12 U.S.C. 1831j(a)) 
is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``provided information'' and inserting 
                ``provided information, or refused to alter information 
                previously provided,''; and
                    (B) in subparagraph (A), by striking ``a possible 
                violation of any law or regulation'' and inserting ``a 
                possible violation of any law, regulation, or agency 
                statement of policy''; and
            (2) in paragraph (2)--
                    (A) by striking ``the Corporation'' and inserting 
                ``any such agency or bank'';
                    (B) by striking ``provided information'' and 
                inserting ``provided information, or refused to alter 
                information previously provided,''; and
                    (C) by striking ``any possible violation of any law 
                or regulation'' and inserting ``any possible violation 
                of any law, regulation, or agency statement of 
                policy''.
    (b) Reward for Information Leading to Recoveries or Civil 
Penalties.--Section 34 of such Act (12 U.S.C. 1831k) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Percentage Limitation.--An appropriate Federal banking agency 
shall pay a reward--
            ``(1) not less than 10 percent, in total, of what has been 
        collected as any fine, penalty, restitution, or forfeiture 
        imposed in the action or related actions; and
            ``(2) not more than 30 percent, in total, of what has been 
        collected as any fine, penalty, restitution, or forfeiture 
        imposed in the action or related actions.''; and
            (2) by striking subsection (d) and inserting the following:
    ``(d) Review.--Any determination regarding an award under this 
section may, within 30 days of such determination, be appealed to the 
appropriate court of appeals of the United States.''.

SEC. 4. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Narrow Definition of Whistleblower Removed.--Section 21F(a) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78u-6(a)) is amended by 
striking paragraph (6).
    (b) Delay.--Section 21F(c)(1)(B) of the Securities Exchange Act of 
1934 (15 U.S.C. 78u-6(c)(1)(B)) is amended--
            (1) in clause (i)(IV), by striking ``and'' at the end; and
            (2) by adding at the end the following new clauses:
                            ``(iii) shall not deny eligibility for an 
                        award that otherwise meets the requirements of 
                        this section if the information that forms the 
                        basis for the award is submitted within 90 days 
                        after knowledge of disclosed misconduct; and
                            ``(iv) shall presume that reports are 
                        timely and not reduce the award due to delay, 
                        absent a finding of that disclosure was 
                        deliberately postponed ether because of 
                        culpability, interference with internal 
                        investigative processes, or attempts at self-
                        enrichment.''.
    (c) Prohibition Against Retaliation.--Section 21F(h)(1)(A) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u-6(h)(1)(A)) is amended--
            (1) in the matter preceding clause (i), by striking ``in 
        the terms and conditions of employment because of any lawful 
        act done by the whistleblower'' and inserting ``with respect to 
        compensation, terms, conditions, or privileges of employment 
        because of any lawful act done by the applicant, employee, or 
        former employee or perceived to have been done by the 
        applicant, employee, or former employee (or any person acting 
        pursuant to the request of the applicant, employee, or former 
        employee), whether at the initiative of the applicant, 
        employee, or former employee or in the ordinary course of the 
        duties of the applicant, employee, or former employee'';
            (2) in clause (ii) by striking ``; or'' and inserting a 
        semicolon;
            (3) in clause (iii) by striking the period at the end and 
        inserting a semicolon; and
            (4) by adding at the end the following new clauses:
                            ``(iv) in objecting to, or refusing to 
                        participate in, any activity, policy, practice, 
                        or assigned task the applicant, employee, or 
                        former employee (or other such person) 
                        reasonably believed to be in violation of any 
                        law, rule, order, standard, or prohibition 
                        subject to the jurisdiction of, or enforceable 
                        by, the Commission; or
                            ``(v) in providing, preparing to provide, 
                        or assisting in the provision of information to 
                        the employer or a person with supervisory 
                        authority over the employee (or other such 
                        person working for the employer who has the 
                        authority to investigate, discover, or 
                        terminate misconduct) relating to any violation 
                        of, or any act or omission that the applicant, 
                        employee, or former employee believes to be a 
                        violation of, any provision of this title or 
                        any other provision of law that is subject to 
                        the jurisdiction of the Commission, or any 
                        rule, order, standard, or prohibition 
                        prescribed by the Commission.''.
    (d) Enforcement.--Section 21F(h)(1)(B) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u-6(h)(1)(B)) is amended by adding at the end 
the following new clause:
                            ``(iv) Burdens of proof.--Except as 
                        otherwise provided in this section, complaints 
                        for relief shall be governed by the procedures, 
                        evidentiary standards, and burdens of proof in 
                        section 1057 of the Dodd-Frank Wall Street 
                        Reform and Consumer Protection Act (12 U.S.C. 
                        5567).''.
    (e) Relief.--Section 21F(h)(1)(C) of the Securities Exchange Act of 
1934 (15 U.S.C. 78u-6(h)(1)(C)) is amended--
            (1) in clause (ii) by striking ``and'';
            (2) in clause (iii) by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new clauses:
                            ``(iv) compensatory damages; and
                            ``(v) punitive damages in an amount not to 
                        exceed $250,000.''.
    (f) Confidentiality.--Section 21F(h)(2) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u-6(h)(2)) is amended by striking subparagraph 
(A) and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), and (D) of this subsection, the 
                Commission and any officer or employee of the 
                Commission may not disclose any identifying information 
                about a whistleblower who has provided information to 
                the Commission--
                            ``(i) unless the Commission has obtained 
                        the written consent of the whistleblower;
                            ``(ii) except in accordance with the 
                        provisions of section 552a of title 5, United 
                        States Code; or
                            ``(iii) unless required to be disclosed to 
                        a defendant or respondent in connection with a 
                        public proceeding instituted by the 
                        Commission.''.
    (g) Additional Protections for Whistleblowers.--Section 21F of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u-6) is amended by adding 
at the end the following new subsections:
    ``(k) Non-Waiverability of Rights and Remedies.--An employer may 
not take any action to impede an individual who is about to or has 
assisted or engaged in activity protected by this section, including--
            ``(1) issuing, proposing, initiating, enforcing, or 
        threatening to enforce, a confidentiality agreement (other than 
        agreements dealing with information covered by sections 
        240.21F-4(b)(4)(i) and 240.21F-4(b)(4)(ii) of title 17, Code of 
        Federal Regulations, as in effect on the date of the enactment 
        of this Act) with respect to such communications;
            ``(2) initiating, enforcing, or threatening to enforce, any 
        agreement, policy, form, or condition of employment, including 
        by any predispute arbitration agreement, that waives the rights 
        and remedies provided for in this section;
            ``(3) requiring an individual to waive, release, or assign 
        any monetary award such individual may receive from the 
        Commission, or conditioning an individual's right to receive 
        any contractual or employment-related benefit on such a waiver, 
        release, or assignment;
            ``(4) requiring an individual to disclose to any private 
        party whether such individual has, or in the future intends to, 
        communicate with the Commission staff about a possible 
        commodities law violation;
            ``(5) conditioning an individual's right to receive any 
        contractual or employment-related benefit on a representation 
        that such individual has not communicated with, or provided 
        documents or other information, to the Commission staff;
            ``(6) seeking civil or criminal liability for acquiring and 
        communicating information to the Commission or other activity 
        protected by this section;
            ``(7) seeking professional discipline through loss of 
        license, certification, or other disciplinary activities for 
        engaging in activity protected by this Act;
            ``(8) seeking professional discipline of attorneys for 
        representation of activities protected by this Act, or other 
        action that obstructs the whistleblower's right to counsel; or
            ``(9) engaging in any other discrimination that would chill 
        the exercise of activity protected by this section.
    ``(l) Internal Compliance Programs.--The Commission shall issue 
regulations requiring each employer--
            ``(1) to have a procedure in place for an employee or 
        former employee to report directly to the chief executive 
        officer, a representative appointed by and reporting directly 
        to the chief executive officer who is specifically designated 
        to receive such a report, or through a hotline consistent with 
        professional best practices to the audit committee of the board 
        of directors, if such employee or former employee believes that 
        violations of this section have occurred or are occurring at 
        the place of employment or place of former employment; and
            ``(2) to not discriminate against an employee or former 
        employee for such reports.
    ``(m) Extraterritoriality.--The protections provided by this 
section shall also apply to foreign nationals living outside the United 
States.''.

SEC. 5. AMENDMENTS TO THE COMMODITY EXCHANGE ACT.

    (a) Narrow Definition of Whistleblower Removed.--Section 23(a) of 
the Commodity Exchange Act (7 U.S.C. 26(a)) is amended by striking 
paragraph (7).
    (b) Delay.--Section 23(c)(1)(B) of the Commodity Exchange Act (7 
U.S.C. 26(c)(1)(B)) is amended--
            (1) in clause (i)(IV), by striking ``and'' at the end; and
            (2) by adding at the end the following new clauses:
                            ``(iii) shall not deny eligibility for an 
                        award that otherwise meets the requirements of 
                        this section if the information that forms the 
                        basis for the award is submitted within 90 days 
                        after knowledge of disclosed misconduct; and
                            ``(iv) shall presume that reports are 
                        timely and not reduce the award due to delay, 
                        absent a finding of that disclosure was 
                        deliberately postponed ether because of 
                        culpability, interference with internal 
                        investigative processes, or attempts at self-
                        enrichment.''.
    (c) Prohibition Against Retaliation.--Section 23(h)(1)(A) of the 
Commodity Exchange Act (7 U.S.C. 26(h)(1)(A)) is amended--
            (1) by striking ``in the terms and conditions of employment 
        because of any lawful act done by the whistleblower'' and 
        inserting ``with respect to compensation, terms, conditions, or 
        privileges of employment because of any lawful act done by the 
        applicant, employee, or former employee or perceived to have 
        been done by the applicant, employee, or former employee (or 
        any person acting pursuant to the request of the applicant, 
        employee, or former employee), whether at the initiative of the 
        applicant, employee, or former employee or in the ordinary 
        course of the duties of the applicant, employee, or former 
        employee'';
            (2) in clause (i), by striking ``; or'' and inserting a 
        semicolon;
            (3) in clause (ii), by striking the period at the end and 
        inserting a semicolon; and
            (4) by inserting the following new clauses:
                            ``(iii) in objecting to, or refusing to 
                        participate in, any activity, policy, practice, 
                        or assigned task the applicant, employee, or 
                        former employee (or other such person) 
                        reasonably believed to be in violation of any 
                        law, rule, order, standard, or prohibition 
                        subject to the jurisdiction of, or enforceable 
                        by, the Commission; or
                            ``(iv) in providing, preparing to provide, 
                        or assisting in the provision of information to 
                        the employer or a person with supervisory 
                        authority over the employee (or such other 
                        person working for the employer who has the 
                        authority to investigate, discover, or 
                        terminate misconduct) relating to any violation 
                        of, or any act or omission that the 
                        whistleblower believes to be a violation of, 
                        any provision of this title or any other 
                        provision of law that is subject to the 
                        jurisdiction of the Commission, or any rule, 
                        order, standard, or prohibition prescribed by 
                        the Commission.''.
    (d) Enforcement.--Section 23(h)(1)(B) of the Commodity Exchange Act 
(7 U.S.C. 26(h)(1)(B)) is amended by adding at the end the following 
new clause:
                            ``(iv) Burdens of proof.--Except as 
                        otherwise provided in this section, complaints 
                        for relief shall be governed by the procedures, 
                        evidentiary standards, and burdens of proof in 
                        section 1057 of the Dodd-Frank Wall Street 
                        Reform and Consumer Protection Act (12 U.S.C. 
                        5567).''.
    (e) Relief.--Section 23(h)(1)(C) of the Commodity Exchange Act (7 
U.S.C. 26(h)(1)(C)) is amended--
            (1) in clause (ii) by striking ``and'';
            (2) in clause (iii) by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new clauses:
                            ``(iv) compensatory damages; and
                            ``(v) punitive damages in an amount not to 
                        exceed $250,000.''.
    (f) Confidentiality.--Section 23(h)(2) of the Commodity Exchange 
Act (7 U.S.C. 26(h)(2)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), and (D) of this subsection, the 
                Commission and any officer or employee of the 
                Commission may not disclose any identifying information 
                about a whistleblower who has provided information to 
                the Commission--
                            ``(i) unless the Commission has obtained 
                        the written consent of the whistleblower;
                            ``(ii) except in accordance with the 
                        provisions of section 552a of title 5, United 
                        States Code; or
                            ``(iii) unless required to be disclosed to 
                        a defendant or respondent in connection with a 
                        public proceeding instituted by the 
                        Commission''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Exempted statute.--For purposes of section 
                552 of title 5, United States Code, this paragraph 
                shall be considered a statute described in subsection 
                (b)(3)(B) of such section 552.''.
    (g) Additional Protections for Whistleblowers.--Section 23 of the 
Commodity Exchange Act (7 U.S.C. 26) is amended by adding at the end 
the following new subsections:
    ``(o) Non-Waiverability of Rights and Remedies.--An employer may 
not take any action to impede an individual who is about to or has 
assisted or engaged in activity protected by this section, including--
            ``(1) issuing, proposing, initiating, enforcing, or 
        threatening to enforce, a confidentiality agreement (other than 
        agreements dealing with information covered by section 165.2(k) 
        of title 17, Code of Federal Regulations, as in effect on the 
        date of the enactment of this Act) with respect to such 
        communications;
            ``(2) initiating, enforcing, or threatening to enforce, any 
        agreement, policy, form, or condition of employment, including 
        by any predispute arbitration agreement, that waives the rights 
        and remedies provided for in this section;
            ``(3) requiring an individual to waive, release, or assign 
        any monetary award such individual may receive from the 
        Commission, or conditioning an individual's right to receive 
        any contractual or employment-related benefit on such a waiver, 
        release, or assignment;
            ``(4) requiring an individual to disclose to any private 
        party whether such individual has, or in the future intends to, 
        communicate with the Commission staff about a possible 
        violation of this Act;
            ``(5) conditioning an individual's right to receive any 
        contractual or employment-related benefit on a representation 
        that such individual has not communicated with, or provided 
        documents or other information, to the Commission staff;
            ``(6) seeking civil or criminal liability for acquiring and 
        communicating information to the Commission or other activity 
        protected by this section;
            ``(7) seeking professional discipline through loss of 
        license, certification or other disciplinary activities for 
        engaging in activity protected by this Act;
            ``(8) seeking professional discipline of attorneys for 
        representation of activities protected by this Act, or other 
        action that obstructs the whistleblower's right to counsel; or
            ``(9) engaging in any other discrimination that would chill 
        the exercise of activity protected by this section.
    ``(p) Internal Compliance Programs.--The Commission shall issue 
regulations requiring each employer--
            ``(1) to have a procedure in place for an employee or 
        former employee to report directly to the chief executive 
        officer, a representative appointed by and reporting directly 
        to the chief executive officer who is specifically designated 
        to receive such a report, or through a hotline consistent with 
        professional best practices to the audit committee of the board 
        of directors, if such employee or former employee believes that 
        a violation of this section has occurred or is occurring at the 
        place of employment or place of former employment; and
            ``(2) to not discriminate against an employee or former 
        employee for such reports.
    ``(q) Extraterritoriality.--The protections provided by this 
section shall also apply to foreign nationals living outside the United 
States.''.

SEC. 6. AMENDMENTS TO THE WHISTLEBLOWER PROTECTIONS UNDER THE SARBANES-
              OXLEY ACT.

    Section 1514A of title 18, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``in the terms and conditions of employment 
                because of any lawful act done by the employee'' and 
                inserting ``with respect to compensation, terms, 
                conditions, or privileges of employment because of any 
                lawful act done by the applicant, employee, or former 
                employee or perceived to have been done by the 
                applicant, employee, or former employee (or any person 
                acting pursuant to the request of the applicant, 
                employee, or former employee), whether at the 
                initiative of the applicant, employee, or former 
                employee or in the ordinary course of the duties of the 
                applicant, employee, or former employee'';
                    (B) in paragraph (1)(C), by striking ``; or'' and 
                inserting a semicolon;
                    (C) in paragraph (2), by striking the period at the 
                end and inserting a semicolon; and
                    (D) by adding at the end the following:
            ``(3) in objecting to, or refusing to participate in, any 
        activity, policy, practice, or assigned task the applicant, 
        employee, or former employee (or other such person) reasonably 
        believed to be in violation of any law, rule, order, standard, 
        or prohibition subject to the jurisdiction of, or enforceable 
        by, the Securities and Exchange Commission; or
            ``(4) in providing, preparing to provide, or assisting in 
        the provision of information to the employer or a person with 
        supervisory authority over the applicant, employee, or former 
        employee (or such other person working for the employer who has 
        the authority to investigate, discover, or terminate 
        misconduct) relating to any violation of, or any act or 
        omission that the whistleblower believes to be a violation of, 
        any provision of this title or any other provision of law that 
        is subject to the jurisdiction of the Securities and Exchange 
        Commission, or any rule, order, standard, or prohibition 
        prescribed by the Commission.'';
            (2) in subsection (c)(2)(B), by inserting ``double'' before 
        ``back pay'';
            (3) in subsection (c), by adding at the end the following:
            ``(3) Punitive damages.--Relief for any action under 
        paragraph (1) may include punitive damages in an amount not to 
        exceed $250,000.''; and
            (4) by adding at the end the following:
    ``(e) Confidentiality.--Neither the Securities and Exchange 
Commission, the Secretary of Labor, nor any officer or employee of the 
Commission or the Secretary may disclose any identifying information 
about an employee of a company described in subsection (a) who has 
provided information to the Commission or the Secretary--
            ``(1) unless the Commission or the Secretary has obtained 
        the written consent of the whistleblower;
            ``(2) except in accordance with the provisions of section 
        552a of title 5, United States Code; or
            ``(3) unless required to be disclosed to a defendant or 
        respondent in connection with a public proceeding instituted by 
        the Commission or the Secretary.''.
                                 <all>