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12-05-2016 - Legal Updates

In Texas, a juvenile criminal record can be sealed in two ways:  (1) automatically restricted to everyone except criminal justice agencies; and (2) permanently sealed and concealed from all.  The…

11-05-2016 - Legal Updates

In Texas, sexting crimes committed by minors and adults are treated differently, with different laws used to prosecute minors versus adults and differing penalties as well. Minor Sexting Texas’ law…

10-05-2016 - Legal Updates

The mother of “affluenza” teen Ethan Couch, who received probation for killing four people while driving drunk, made the grave error of trying to help her son escape more trouble…

09-05-2016 - Legal Updates

Typically, federal courts have exclusive jurisdiction over federal offenses and state courts have exclusive jurisdiction over state offenses.   In some cases, certain crimes can qualify as both federal and state…

06-05-2016 - Legal Updates

  Texas passed a stand your ground law in 2007, which allows for the use of force “when and to the degree the actor reasonably believes the force is immediately…

05-05-2016 - Fraud

A Watertown, Massachusetts, man has been convicted of securities fraud after a federal jury in Boston found him guilty of profiting from an insider trading tip he received on a…

SEC Goes After Confidentiality Agreements That Curb Whistleblowing

May 08, 2015 by Cogdell Law Firm


The Securities and Exchange Commission (“SEC”) has announced its first enforcement action against a company for violating whistleblower protection Rule 21F-17 of the Dodd-Frank Act, which prohibits companies from impeding whistleblowers from reporting potential securities violations to the SEC.

According to the SEC, Houston-based KBR, Inc.,  required employees involved in internal investigations to sign a confidentiality agreement that banned them from discussing those investigations with outsiders without prior approval from the company’s legal department.  Violating the agreement could subject the employees to disciplinary actions, including termination.

The SEC said that by requiring employees to seek internal approval before reporting any securities violations to the SEC, KBR potentially discouraged employees from reporting violations.

As part of its settlement with the SEC, KBR has agreed to pay a $130,000 fine and amend the confidentiality agreement to clarify that employees may report any possible violations to the SEC or other federal agencies without prior company approval or fear of retaliation.  In addition, KBR agreed to notify employees who had signed the confidentiality agreement of the SEC action.

The SEC said that any blanket prohibition on employees’ rights to report violations to any governmental agency has a potential chilling effect on the reporting of illegal activities.

“Other employers should similarly review and amend existing and historical agreements that in word or effect stop their employees from reporting potential violations to the SEC,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower.

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense.  When results matter most, contact Dan Cogdell at 713-426-2244 or