COMMENTS BY PROFESSOR PRINCE AND THREE OTHERS ADOPTED RE MODEL WHISTLEBLOWER AWARD AND PROTECTION ACT
August 2020 — In June 2020, Professor Samantha Prince, Professor Andrew Jennings (Stanford), Professor Ben Edwards (UNLV) and Professor Andrew Baker (Stanford) submitted comments to the North American Securities Administrators Association (NASAA) regarding its proposed Model Whistleblower Award and Protection Act. In late August 2020, NASAA released the final version of the act; showed that NASAA had revised its Model law in order to respond to the problem Professor Prince and others had identified.
The comments from Professors Prince, Jennings, Edwards, and Baker had highlighted two main areas of concern. First, their comment letter noted that in the recent U.S. Supreme Court case of Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767, 778 (2018), the Court held that the Dodd-Frank Act did not protect those who only blow the whistle internally and not also to a governmental agency. The Professors urged a revision to the proposed act that would give internal securities whistleblowers a state retaliation right of action. Their comment letter also urged NASAA to add a whistleblower-award provision that would allow for attorney-mediated anonymous reporting.
In late August 2020, NASAA released the final version of the act (the Final Act); it had revised the Final Act in order to respond to the problem Professor Prince and others had identified. The Final Act’s Section 10 resolved the Professors’ Digital Realty concern by extending anti-retaliation protections to those who report only internally. The Final Act’s Section 4 addressed their concern that whistleblowers who submit anonymous reports pre-award should remain eligible for whistleblower awards. A copy of the Professors’ comment letter, introductory note and the Model Whistleblower Award and Protection Act can be found here.
Professor Samantha Prince is an Associate Professor of Lawyering Skills and Entrepreneurship at Penn State Dickinson Law. She has a Master of Laws in Taxation from Georgetown University Law Center, and was a partner in a regional law firm where she handled transactional matters that ranged from an initial public offering to regular representation of a publicly-traded company. Most of her clients were small to medium sized businesses and entrepreneurs, including start-ups. An expert in entrepreneurship law, she established the Penn State Dickinson Law entrepreneurship program, is an advisor for the Entrepreneurship Law Certificate that is available to students, and is the founder and moderator of the Inside Entrepreneurship Law blog.