Securities Litigation

The SEC announced its second enforcement action in a week against a company using severance or confidentiality agreements requiring employees to waive whistleblower bounties or their right to bring a qui tam action.

In this week's settled action, the SEC fined publicly-traded Health Net $340,000 for having used severance agreements (over 4 years) that expressly allowed government reporting and cooperation in investigations but required waiver of monetary awards and qui tam actions. The offending agreements included waivers of:

"the right to file an application for award for ...