SEC Charges Seven Public Companies with Violations of Whistleblower Protection Rule
summary
Seven public companies settled SEC charges for violating Rule 21F-17(a) by using agreements that impeded whistleblowers, resulting in over $3 million in combined civil penalties.
paragraph
The SEC charged seven companies, including Acadia Healthcare and TransUnion, with violating Rule 21F-17(a) for impeding whistleblower communication. The firms agreed to pay more than $3 million in combined civil penalties, with individual fines ranging from $19,500 to $1,386,000. Each company settled the charges by agreeing to remediate their agreements and cease future violations.
narrative
The SEC announced settled charges against seven public companies for violating whistleblower protection Rule 21F-17(a). The companies, which include Acadia Healthcare, AppFolio, and TransUnion, used employment and separation agreements that required employees to waive their rights to whistleblower monetary awards. This practice impeded individuals from communicating directly with the SEC regarding potential securities law violations. To resolve the matter, the firms agreed to pay more than $3 million in combined civil penalties, with individual amounts ranging from $19,500 to $1,386,000. Each company has committed to remediating their agreements to ensure future compliance. The SEC emphasized that these settlements are critical for maintaining market integrity through effective whistleblower protections.
Classified non-corporate(confidence 97%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Statutes
Rule 21F-17(a)
Parties
acadia healthcare company, inc.appfolio, inc.brands holding corp.creola kellyidex corporationjason j. burtlsb industriesSecurities and Exchange Commissionsmart for life, inc.
Keywords
seccivil penaltyagreedpaycivilwhistleblowerpenaltyseven publicpublic companieswhistleblower protectiondenver regionalcompaniesprotectionsecuritiespotential
Exhibits & Attached Documents (7)
Extracted insights
Dollar amounts 8
- $3.00M $3 million $1M–$10M
- $1.39M $1,386,000 $1M–$10M
- $692K $692,250 $100K–$1M
- $400K $399,750 $100K–$1M
- $312K $312,000 $100K–$1M
- $156K $156,000 $100K–$1M
- $75K $75,000 $10K–$100K
- $20K $19,500 $10K–$100K
Entities 9
- company acadia healthcare company, inc.
- company appfolio, inc.
- company brands holding corp.
- person creola kelly
- company idex corporation
- person jason j. burt
- company lsb industries
- agency Securities and Exchange Commission
- company smart for life, inc.
Triples 12
- Securities and Exchange Commission announced settled charges seven public companies
- Acadia Healthcare Company, Inc. agreed to pay $1,386,000 civil penalty
- Brands Holding Corp. agreed to pay $399,750 civil penalty
- AppFolio, Inc. agreed to pay $692,250 civil penalty
- IDEX Corporation agreed to pay $75,000 civil penalty
- LSB Industries agreed to pay $156,000 civil penalty
- Smart for Life, Inc. agreed to pay $19,500 civil penalty
- TransUnion agreed to pay $312,000 civil penalty
- Jason J. Burt said The SEC’s whistleblower program strengthens market integrity by providing protection and incentives for those who come forward and report potential violations of the securities laws
- Creola Kelly said Ensuring that potential whistleblowers can communicate directly with the Commission is a critical part of the SEC’s oversight mandate
- The firms were charged with violating whistleblower protection Rule 21F-17(a)
- Each of the firms has agreed not to violate this rule in the future
PDF (from attached: pdf)
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Extracted body text (2,276c)
The Securities and Exchange Commission today announced settled charges against seven public companies for using employment, separation, and other agreements that violated rules prohibiting actions to impede whistleblowers from reporting potential misconduct to the SEC. To settle the SEC’s charges, the companies agreed to pay more than $3 million combined in civil penalties. Acadia Healthcare Company, Inc., agreed to pay a $1,386,000 civil penalty; a.k.a. Brands Holding Corp. agreed to pay a $399,750 civil penalty; AppFolio, Inc., agreed to pay a $692,250 civil penalty; IDEX Corporation agreed to pay a $75,000 civil penalty; LSB Industries agreed to pay a $156,000 civil penalty; Smart for Life, Inc. agreed to pay a $19,500 civil penalty; and TransUnion agreed to pay a $312,000 civil penalty. “The SEC’s whistleblower program strengthens market integrity by providing protection and incentives for those who come forward and report potential violations of the securities laws,” said Jason J. Burt, Director of the SEC’s Denver Regional Office. “According to the SEC’s orders, among other things, these companies required employees to waive their right to possible whistleblower monetary awards. This severely impedes would-be whistleblowers from reporting potential securities law violations to the SEC.” “Ensuring that potential whistleblowers can communicate directly with the Commission is a critical part of the SEC’s oversight mandate,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. The firms were each charged with violating whistleblower protection Rule 21F-17(a), which prohibits any action to impede an individual from communicating directly with the SEC staff about a possible securities law violation. Each of the firms has agreed not to violate this rule in the future and has taken steps to remediate the violations, including making changes to the relevant agreements. The SEC’s investigation, which is ongoing, is being conducted by Eric Day of the Denver Regional Office with assistance from Helena Engelhart Bean and the staff of the SEC’s Office of the Whistleblower, including Kelly Breakey and Elizabeth McMurray, and is supervised by Danielle R. Voorhees, Nicholas P. Heinke, and Mr. Burt, also of the Denver Regional Office.
OCR text (2,276c · html-text · 99% conf)
The Securities and Exchange Commission today announced settled charges against seven public companies for using employment, separation, and other agreements that violated rules prohibiting actions to impede whistleblowers from reporting potential misconduct to the SEC. To settle the SEC’s charges, the companies agreed to pay more than $3 million combined in civil penalties. Acadia Healthcare Company, Inc., agreed to pay a $1,386,000 civil penalty; a.k.a. Brands Holding Corp. agreed to pay a $399,750 civil penalty; AppFolio, Inc., agreed to pay a $692,250 civil penalty; IDEX Corporation agreed to pay a $75,000 civil penalty; LSB Industries agreed to pay a $156,000 civil penalty; Smart for Life, Inc. agreed to pay a $19,500 civil penalty; and TransUnion agreed to pay a $312,000 civil penalty. “The SEC’s whistleblower program strengthens market integrity by providing protection and incentives for those who come forward and report potential violations of the securities laws,” said Jason J. Burt, Director of the SEC’s Denver Regional Office. “According to the SEC’s orders, among other things, these companies required employees to waive their right to possible whistleblower monetary awards. This severely impedes would-be whistleblowers from reporting potential securities law violations to the SEC.” “Ensuring that potential whistleblowers can communicate directly with the Commission is a critical part of the SEC’s oversight mandate,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. The firms were each charged with violating whistleblower protection Rule 21F-17(a), which prohibits any action to impede an individual from communicating directly with the SEC staff about a possible securities law violation. Each of the firms has agreed not to violate this rule in the future and has taken steps to remediate the violations, including making changes to the relevant agreements. The SEC’s investigation, which is ongoing, is being conducted by Eric Day of the Denver Regional Office with assistance from Helena Engelhart Bean and the staff of the SEC’s Office of the Whistleblower, including Kelly Breakey and Elizabeth McMurray, and is supervised by Danielle R. Voorhees, Nicholas P. Heinke, and Mr. Burt, also of the Denver Regional Office.