'Where Does That Stop?' — SEC Zeroes in on Risk Controls

Securities Enforcement Defense attorney Scott Mascianica was cited in an Agenda article about the U.S. Securities and Exchange Commission's (SEC) recent settlement with Activision Blizzard and its implications for whistleblower protections and disclosure controls at public companies. In the settlement, the SEC alleged Activision failed to maintain disclosure controls related to workplace misconduct; the commission also claimed Activision used separation agreements requiring employees to notify the company if they received a request for information from a government agency related to a report or complaint, in violation of whistleblower protection laws. Mr. Mascianica commented that companies should take care when determining what information to send to boards and other decision-makers so they can choose what to include in public reports. He also explained that while the SEC has brought whistleblower protection-related enforcement actions in the past, the purpose behind the rulemaking leaves some room for interpretation that could expose companies to regulatory action.

"The language of the rule says one thing," he said. "The adopting release and the way the commission has interpreted it are a little bit different."

READ: 'Where Does That Stop?' — SEC Zeroes in on Risk Controls (Subscription required)