You are the Chief Compliance Officer of Investment Bank, Inc, a publicly traded company with its common stock registered under the Securities Exchange Act of 1934.  The board of directors has asked you about best practices regarding Compliance Policies and Procedures ("Compliance Policies").  The board is particularly interested in the anti-retaliation provisions that are often included in Compliance Policies.  

Questions

The board has asked you to review the following Compliance Policies: 

• Amgen - Global Corporate Compliance Policy
• HMC Holding SE - Compliance Reporting Policy
• Adirondack Health Institute - Compliance Reporting and Response
• Atlas Corp - Compliance Reporting Policy
• Mitsubishi Corporation Compliance Report

After you have reviewed these Compliance Policies, you are to come up with a memo between three to five pages long for the board of directors, in which you:

• Identify at least five anti-retaliation issues that you believe should be addressed in Investment Bank's Compliance Policies.  In doing so, you should explain why you believe those issues are important.  You should also refer to specific examples of how those issues are covered in the Compliance Policies that the board has asked you to review.
• Identify at least two weaknesses that you see in each of the anti-retaliation provisions in the Compliance Policies that you have been asked to review.
• Summarize Section 1514A (Civil Action to Protect against Retaliation in Fraud Cases) of the Sarbanes Oxley Act (which is set forth below) and:
  • State why you believe Congress adopted this provision
  • Explain how the provision works
  • Draft a one paragraph hypothetical fact pattern that describes a potential violation of this provision.
    • Your hypothetical fact pattern should begin: "Anne sent an email to the Securities and Exchange Commission describing three transactions that Anne reasonably believes constitutes a violation of Federal securities law....."

Sarbanes-Oxley Act Section 1514A - Civil Action to Protect against Retaliation in Fraud Cases

(a) Whistleblower protection for employees of publicly traded companies.  

No company with a  class of securities registered under...the Securities Exchange Act of 1934...or any officer, employee, contractor, subcontractor, or agent of such company or nationally recognized statistical rating organization, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee--

(1) to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of...any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by--

(A) a Federal regulatory or law enforcement agency;
(B) any Member of Congress or any committee of Congress; or
(C) 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); or

(2) to file, cause to be filed, testify, participate in, or otherwise assist in a proceeding filed or about to be filed (with any knowledge of the employer) relating to an alleged violation of... any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders.

(b) Enforcement action.

(1) In general. A person who alleges discharge or other discrimination by any person in violation of subsection (a) may seek relief under subsection (c), by--

(A) filing a complaint with the Secretary of Labor; or

(B) if the Secretary has not issued a final decision within 180 days of the filing of the complaint... bringing an action...in the appropriate district court of the United States....

(c) Remedies.

(1) In general. An employee prevailing in any action under subsection (b)(1) shall be entitled to all relief necessary to make the employee whole.
(2) Compensatory damages.--Relief for any action under paragraph (1) shall include--

(A) reinstatement with the same seniority status that the employee would have had, but for the discrimination;
(B) the amount of back pay, with interest; and
(C) compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorney fees.....