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Sponsors
1 Co-sponsor
History
- Referred to finance
- Referred to finance
Full text
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Sponsor's memo
BILL NUMBER:S4362
Title of bill
An act to amend the financial services law, in relation to protecting and compensating whistleblowers who provide original information to the department of financial services as to violations of the banking law, the insurance law, the financial services law and any other applicable law
Purpose of the Bill: This bill would amend the Financial Services Law (FSL) in order to provide a mechanism for rewarding employees of financial services providers who disclose information of wrongdoing to the Department of Financial Services (Department or DFS) that forms the basis for a successful enforcement action against institutions by DFS. Summary of Provisions:
Section 1 would amend Section 104 of the FSL to define, among other terms, "award", "monetary sanctions", and "whistleblower".
Section 2 would amend the FSL to add a new Section 408-a setting forth the rewards and protections available to whistleblowers under the FSL.
Section 3 would provide for an effective date of 90 days after the bill becomes law.
Existing Law: The FSL is currently silent with regard to whistleblowers and whistleblower protection. Prior Legislative History: This is a new bill.
Statement in Support: Whistleblower protection has expanded into numerous areas including environmental protection, nuclear power, corporate fraud and, most recently, the securities industry. The latter is addressed by specific provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank offers whistleblowers significant incentives and increased protection from retaliation. Specifically, it authorizes the Securities and Exchange Commission (SEC) to reward those who provide information concerning violation of federal securities laws at companies that are required to report to the SEC. The law also prohibits employers from retaliating against whistleblowers.
However, sanctions against employers who retaliate against whistleblowers are currently quite limited in New York. This bill is consistent with the mandate of DFS to protect consumers and markets from the misconduct of financial services entities. This would be accomplished by allowing whistleblowers to share in monetary sanctions imposed as a result of their disclosure of information regarding the violation of the insurance, banking and/or financial services law. Recognizing that it is not uncommon for whistleblowers to be discriminated against or fired by their employers, the bill creates legal protections for the latter that parallel the remedies provided by the New York False Claims Act.
Fiscal Implications: None for the State.
Effective Date: This bill would take effect 90 days after it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.