Earlier this year, the North American Securities Administrators Association released a draft Model Whistleblower Act.  As I wrote when the draft act emerged, the draft model legislation seemed to closely track the federal whistleblower-bounty program enacted as a part of Dodd-Frank.  In cribbing from Dodd-Frank, the initial draft picked up one of the problems with Dodd-Frank in that it contained language which had been interpreted to only protect whistleblowers who went to the regulator–not whistleblowers who reported internally.

To help states avoid the problem, Andrew Jennings led a comment letter effort, which I joined along with Andrew Baker and Samantha Prince.  Our comment letter (one of only seven submitted) explained that the draft language could be improved to address two concerns: (i) explicitly protecting internal reporting; and (ii) making clear that whistleblowers may anonymously report via counsel.

NASAA amended the draft model legislation to address these concerns.   The final model legislation now explicitly protects internal whistleblowers and contemplates anonymous whistleblowing through counsel.

I’m enormously grateful to Andrew Jennings for taking on drafting the letter at a time when he could have otherwise been pursuing purely academic scholarship.  This kind of involvement matters and has a real impact.  In the future, some financial services employee will undoubtedly suffer retaliation for reporting wrongdoing internally.  Once states adopt the model legislation, these internal reporters will have some protection.