[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2591 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 2591

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 2016

  Ms. Baldwin introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 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. FINANCIAL INSTITUTIONS ANTI-FRAUD ENFORCEMENT ACT OF 1990.

    The Financial Institutions Anti-Fraud Enforcement Act of 1990 (12 
U.S.C. 4201 et seq.) is amended--
            (1) in section 2565(d) (12 U.S.C. 4205(d))--
                    (A) in paragraph (1)(A), by striking clause (i) and 
                inserting the following:
                    ``(i) The declarant shall be entitled, with respect 
                to the total recovery in the action or any related 
                actions, to--
                            ``(I) not less than 10 percent; and
                            ``(II) not greater than 30 percent.''; and
                    (B) by adding at the end the following:
            ``(3) Any determination regarding an award under this 
        section may, not later than 30 days after the date on which the 
        determination is made, be appealed to the appropriate court of 
        appeals of the United States.'';
            (2) by striking section 2572 (12 U.S.C. 4212) and inserting 
        the following:

``SEC. 2572. PROTECTION FOR DECLARANTS.

    ``(a) Remedy.--A person may obtain all relief necessary to make the 
person whole if--
            ``(1) an employer discharged, demoted, suspended, 
        threatened, harassed, or in any other manner discriminated 
        against the person in the terms and conditions of the 
        employment of the person because of lawful acts taken by the 
        person--
                    ``(A) 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, United 
                States Code; and
                    ``(B) including the provision of information that 
                relates to, initiates, or assists--
                            ``(i) a prosecution described in 
                        subparagraph (A); or
                            ``(ii) the investigation of or testimony in 
                        a prosecution described in subparagraph (A); 
                        and
            ``(2) the person acted upon the direction of the employer 
        of the person 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 to which 
        the person would have been entitled but for the action of the 
        employer; and
            ``(3) compensation for any special damages sustained as a 
        result of the action of the employer, including--
                    ``(A) litigation costs;
                    ``(B) expert witness fees; and
                    ``(C) reasonable attorneys fees.
    ``(c) Burdens of Proof.--Complaints for relief under this section 
shall be governed by the procedures, evidentiary standards, and burdens 
of proof under section 1057 of the Consumer Financial Protection Act of 
2010 (12 U.S.C. 5567).'';
            (3) in section 2573 (12 U.S.C. 4213)--
                    (A) by striking ``The Attorney General'' and 
                inserting the following:
    ``(a) In General.--The Attorney General''; and
                    (B) by adding at the end the following:
    ``(b) Education.--The Attorney General shall issue regulations 
requiring every employer covered under this Act to provide education 
and training to the employees of the employer on the rights and 
remedies provided under this section, including by--
            ``(1) providing individual notice to the employees;
            ``(2) posting information on the home page of the website 
        of the employer; and
            ``(3) providing mandatory training for the employees.'';
            (4) in section 2580 (12 U.S.C. 4225), by striking 
        subsection (c) and inserting the following:
    ``(c) Share of Assets.--When the United States recovers any asset 
specifically identified in a valid declaration filed under section 2576 
and the Attorney General determines that the asset would not have been 
recovered if the declarant had not filed the declaration, the declarant 
shall have the right to share in the recovery in the amount of, with 
respect to the total amount of the recovery in the action or related 
actions--
            ``(1) not less than 10 percent; and
            ``(2) not greater than 30 percent.''; and
            (5) by striking section 2583 (12 U.S.C. 4228) and inserting 
        the following:

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

    ``Any determination regarding an award under this chapter may, not 
later than 30 days after the date on which the determination is made, 
be appealed to the appropriate court of appeals of the United 
States.''.

SEC. 3. FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 33(a) (12 U.S.C. 1831j(a))--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``(or refused to alter 
                        information previously provided)'' after 
                        ``provided information''; and
                            (ii) 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
                    (B) in paragraph (2), in the matter preceding 
                subparagraph (A)--
                            (i) by striking ``the Corporation'' and 
                        inserting ``any such entity'';
                            (ii) by inserting ``(or refused to alter 
                        information previously provided)'' after 
                        ``provided information''; and
                            (iii) by striking ``any possible violation 
                        of any law or regulation'' and inserting ``any 
                        possible violation of any law, regulation, or 
                        agency statement of policy,''; and
            (2) in section 34 (12 U.S.C. 1831k)--
                    (A) by striking subsection (b) and inserting the 
                following:
    ``(b) Percentage Limitation.--An appropriate Federal banking 
agency, when paying a reward under subsection (a), shall pay a reward 
equivalent to--
            ``(1) not less than 10 percent of the amount of any fine, 
        penalty, restitution, or forfeiture; and
            ``(2) not greater than 30 percent of the amount of any 
        fine, penalty, restitution, or forfeiture.''; and
                    (B) by striking subsection (d) and inserting the 
                following:
    ``(d) Review.--Any determination regarding an award under this 
section may, not later than 30 days after the date on which the 
determination is made, be appealed to the appropriate court of appeals 
of the United States.''.

SEC. 4. SECURITIES EXCHANGE ACT OF 1934.

    Section 21F of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
6) is amended--
            (1) in subsection (a), by striking paragraph (6);
            (2) in subsection (c)(1)(B)--
                    (A) in clause (i)(IV), by striking ``and'' at the 
                end;
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) may 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 not later than 
                        90 days after a whistleblower gains knowledge 
                        of the disclosed misconduct;
                            ``(iv) shall presume that a report made by 
                        a whistleblower is timely submitted; and
                            ``(v) may not reduce the award due to 
                        delay, absent a finding that the disclosure was 
                        deliberately postponed because of--
                                    ``(I) culpability of the 
                                whistleblower;
                                    ``(II) interference by the 
                                whistleblower with internal 
                                investigative processes; or
                                    ``(III) attempts at self-enrichment 
                                by the whistleblower.'';
            (3) in subsection (h)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in the matter preceding clause 
                                (i)--
                                            (aa) by striking ``No 
                                        employer'' and inserting ``No 
                                        employer, prospective employer, 
                                        or former employer, as 
                                        applicable,''; and
                                            (bb) by striking ``a 
                                        whistleblower in the terms and 
                                        conditions of employment 
                                        because of any lawful act done 
                                        by the whistleblower'' and 
                                        inserting ``a whistleblower 
                                        with respect to the 
                                        compensation, terms, 
                                        conditions, or privileges of 
                                        employment of the whistleblower 
                                        because of any lawful act done 
                                        by the whistleblower or 
                                        perceived to have been done by 
                                        the whistleblower (or any 
                                        person acting pursuant to a 
                                        request of the whistleblower), 
                                        whether at the initiative of 
                                        the whistleblower or in the 
                                        ordinary course of the duties 
                                        of the whistleblower'';
                                    (II) in clause (ii) by striking 
                                ``or'' at the end;
                                    (III) in clause (iii) by striking 
                                the period at the end and inserting a 
                                semicolon; and
                                    (IV) by adding at the end the 
                                following:
                            ``(iv) in objecting to, or refusing to 
                        participate in, any activity, policy, practice, 
                        or assigned task that the whistleblower (or 
                        other such person) reasonably believed to be in 
                        violation of any law, rule, order, standard, or 
                        prohibition that is 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, prospective employer, former 
                        employer, a person with supervisory authority 
                        over the employee, or another such person 
                        working for the employer with the authority to 
                        investigate, discover, or terminate as a result 
                        of misconduct relating to any violation of, or 
                        any act or omission that the whistleblower 
                        believes to be a violation of any--
                                    ``(I) provision of this title;
                                    ``(II) other provision of law that 
                                is subject to the jurisdiction of the 
                                Commission; or
                                    ``(III) rule, order, standard, or 
                                prohibition prescribed by the 
                                Commission.'';
                            (ii) in subparagraph (B), by adding at the 
                        end the following:
                            ``(iv) Burden 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 Consumer Financial 
                        Protection Act of 2010 (12 U.S.C. 5567).''; and
                            (iii) in subparagraph (C)--
                                    (I) in clause (ii), by striking 
                                ``and'' at the end;
                                    (II) in clause (iii), by striking 
                                the period at the end and inserting a 
                                semicolon; and
                                    (III) by adding at the end the 
                                following:
                            ``(iv) compensatory damages; and
                            ``(v) punitive damages in an amount not 
                        greater than $250,000.''; and
                    (B) in paragraph (2), by striking subparagraph (A) 
                and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), and (D), neither the Commission 
                nor any officer or employee of the Commission may 
                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
            (4) by adding at the end the following:
    ``(k) Non-Waiverability of Rights and Remedies.--An employer, 
prospective employer, or former employer, as applicable, 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 subsection) 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 under this section;
            ``(3) requiring the individual to waive, release, or assign 
        any monetary award that the individual may receive from the 
        Commission;
            ``(4) conditioning the right of the individual to receive 
        any contractual or employment-related benefit on a waiver, 
        release, or assignment described in paragraph (3);
            ``(5) requiring the individual to disclose to any private 
        party whether the individual has, or in the future intends to, 
        communicate with the staff of the Commission about a possible 
        violation of commodities law;
            ``(6) conditioning the right of the individual to receive 
        any contractual or employment-related benefit on a 
        representation that the individual has not communicated with, 
        or provided documents or other information, to the staff of the 
        Commission;
            ``(7) seeking civil or criminal liability for--
                    ``(A) acquiring and communicating information to 
                the Commission; or
                    ``(B) engaging in other activity protected by this 
                section;
            ``(8) seeking professional discipline through loss of 
        license, certification, or other disciplinary activities for 
        engaging in activity protected by this section;
            ``(9) seeking professional discipline of attorneys for 
        representation of activities protected by this section, or any 
        other action that obstructs the right to counsel of the 
        individual; and
            ``(10) engaging in any other discrimination that would 
        chill the exercise of activity protected by this section.
    ``(l) Internal Compliance Programs.--The Commission shall 
promulgate regulations requiring each employer--
            ``(1) to have a procedure in place for an employee, 
        applicant for employment, or former employee who believes that 
        violations of this section have occurred or are occurring at 
        the place of employment, place of prospective employment, or 
        place of former employment to report--
                    ``(A) directly to the chief executive officer of 
                the employer;
                    ``(B) to a representative appointed by and 
                reporting directly to the chief executive officer who 
                is specifically designated to receive such a report; or
                    ``(C) through a hotline consistent with 
                professional best practices to the audit committee of 
                the board of directors; and
            ``(2) not to discriminate against an employee, applicant 
        for employment, or former employee for making a report under 
        paragraph (1).
    ``(m) Extraterritoriality.--The protections provided by this 
section shall apply to foreign nationals living outside the United 
States.''.

SEC. 5. COMMODITY EXCHANGE ACT.

    Section 23 of the Commodity Exchange Act (7 U.S.C. 26) is amended--
            (1) in subsection (a), by striking paragraph (7);
            (2) in subsection (c)(1)(B)--
                    (A) in clause (i)(IV), by striking ``and'' at the 
                end;
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) may 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 not later than 
                        90 days after a whistleblower gains knowledge 
                        of the disclosed misconduct;
                            ``(iv) shall presume that a report made by 
                        a whistleblower is timely submitted; and
                            ``(v) may not reduce the award due to 
                        delay, absent a finding that the disclosure was 
                        deliberately postponed because of--
                                    ``(I) culpability of the 
                                whistleblower;
                                    ``(II) interference by the 
                                whistleblower with internal 
                                investigative processes; or
                                    ``(III) attempts at self-enrichment 
                                by the whistleblower.'';
            (3) in subsection (h)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in the matter preceding clause 
                                (i)--
                                            (aa) by striking ``No 
                                        employer'' and inserting ``No 
                                        employer, prospective employer, 
                                        or former employer, as 
                                        applicable,''; and
                                            (bb) by striking ``a 
                                        whistleblower in the terms and 
                                        conditions of employment 
                                        because of any lawful act done 
                                        by the whistleblower'' and 
                                        inserting ``a whistleblower 
                                        with respect to the 
                                        compensation, terms, 
                                        conditions, or privileges of 
                                        employment of the whistleblower 
                                        because of any lawful act done 
                                        by the whistleblower or 
                                        perceived to have been done by 
                                        the whistleblower (or any 
                                        person acting pursuant to a 
                                        request of the whistleblower), 
                                        whether at the initiative of 
                                        the whistleblower or in the 
                                        ordinary course of the duties 
                                        of the whistleblower'';
                                    (II) in clause (i), by striking 
                                ``or'' at the end;
                                    (III) in clause (ii), by striking 
                                the period at the end and inserting a 
                                semicolon; and
                                    (IV) by adding at the end the 
                                following:
                            ``(iii) in objecting to, or refusing to 
                        participate in, any activity, policy, practice, 
                        or assigned task the whistleblower (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, the former employer, the 
                        prospective employer, a person with supervisory 
                        authority over the employee, or another such 
                        person working for the employer with the 
                        authority to investigate, discover, or 
                        terminate as a result of misconduct relating to 
                        any violation of, or any act or omission that 
                        the whistleblower believes to be a violation of 
                        any--
                                    ``(I) provision of this title;
                                    ``(II) other provision of law that 
                                is subject to the jurisdiction of the 
                                Commission; or
                                    ``(III) rule, order, standard, or 
                                prohibition prescribed by the 
                                Commission.'';
                            (ii) in subparagraph (B), by adding at the 
                        end the following:
                            ``(iv) Burden 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 Consumer Financial 
                        Protection Act of 2010 (12 U.S.C. 5567).''; and
                            (iii) in subparagraph (C)--
                                    (I) in clause (ii), by striking 
                                ``and'' at the end;
                                    (II) in clause (iii), by striking 
                                the period at the end and inserting a 
                                semicolon; and
                                    (III) by adding at the end the 
                                following:
                            ``(iv) compensatory damages; and
                            ``(v) punitive damages in an amount not 
                        greater than $250,000.''; and
                    (B) in paragraph (2)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), and (D), neither the Commission 
                nor any officer or employee of the Commission may 
                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
                            (ii) by adding at the end the following:
                    ``(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.''; and
            (4) by adding at the end the following:
    ``(o) Non-Waiverability of Rights and Remedies.--An employer, 
former employer, or prospective employer, as applicable, 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 subsection) 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 the individual to waive, release, or assign 
        any monetary award that the individual may receive from the 
        Commission;
            ``(4) conditioning the right of the individual to receive 
        any contractual or employment-related benefit on a waiver, 
        release, or assignment described in paragraph (3);
            ``(5) requiring the individual to disclose to any private 
        party whether the individual has, or in the future intends to, 
        communicate with the staff of the Commission about a possible 
        violation of this Act;
            ``(6) conditioning the right of the individual to receive 
        any contractual or employment-related benefit on a 
        representation that the individual has not communicated with, 
        or provided documents or other information, to the staff of the 
        Commission;
            ``(7) seeking civil or criminal liability for--
                    ``(A) acquiring and communicating information to 
                the Commission; or
                    ``(B) engaging in other activity protected by this 
                section;
            ``(8) seeking professional discipline through loss of 
        license, certification, or other disciplinary activities for 
        engaging in activity protected by this section;
            ``(9) seeking professional discipline of attorneys for 
        representation of activities protected by this section, or any 
        other action that obstructs the right to counsel of the 
        individual; and
            ``(10) 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, 
        applicant for employment, or former employee who believes that 
        violations of this section have occurred or are occurring at 
        the place of employment, prospective employment, or place of 
        former employment to report--
                    ``(A) directly to the chief executive officer of 
                the employer;
                    ``(B) to a representative appointed by and 
                reporting directly to the chief executive officer who 
                is specifically designated to receive such a report; or
                    ``(C) through a hotline consistent with 
                professional best practices to the audit committee of 
                the board of directors; and
            ``(2) not to discriminate against an employee, applicant 
        for employment, or former employee for making a report under 
        paragraph (1).
    ``(q) Extraterritoriality.--The protections provided by this 
section shall apply to foreign nationals living outside the United 
States.''.

SEC. 6. 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 an employee, applicant for 
                employment, or former employee or perceived to have 
                been done by an employee, applicant for employment, or 
                former employee (or any person acting pursuant to the 
                request of such an individual), whether at the 
                initiative of the employee, applicant for employment, 
                or former employee or in the ordinary course of the 
                duties of the employee, applicant for employment, 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 employee, 
        applicant for employment, 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 enforced 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 employee, applicant for 
        employment, or former employee (or such other person working 
        for the employer who has the authority to investigate, 
        discover, or terminate employment as a result of misconduct) 
        relating to any violation of, or any act or omission that the 
        employee, applicant for employment, or former employee believes 
        to be a violation of any--
                    ``(A) provision of this title;
                    ``(B) provision of law that is subject to the 
                jurisdiction of the Securities and Exchange Commission; 
                or
                    ``(C) rule, order, standard, or prohibition 
                prescribed by the Commission.'';
            (2) in subsection (c)--
                    (A) in paragraph (2)(B), by inserting ``double'' 
                before ``the amount of''; and
                    (B) 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 
        greater than $250,000.''; and
            (3) by adding at the end the following:
    ``(f) 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, applicant for employment, or former employee 
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 employee, applicant for employment, 
        or former employee;
            ``(2) except in accordance with the provisions of section 
        552a of title 5; 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.''.
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