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S.B. 90

This document includes Senate Committee Amendments incorporated into the bill on Thu, Jan 26, 2012 at 9:34 AM by kcallred. --> This document includes Senate Committee Amendments incorporated into the bill on Thu, Jan 26, 2012 at 3:54 PM by khelgesen. --> This document includes House Committee Amendments incorporated into the bill on Fri, Feb 3, 2012 at 11:35 AM by lerror. -->              1     

SECURITIES FRAUD REPORTING PROGRAM ACT

             2     
AMENDMENTS

             3     
2012 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Benjamin M. McAdams

             6     
House Sponsor: Jim Bird

             7     

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Securities Fraud Reporting Program Act to address various
             11      issues.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies exemptions from protections for adverse actions;
             15          .    addresses considerations for the amount of an award;
             16          .    modifies exemptions from awards under the chapter; and
             17          .    makes technical and conforming amendments.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          61-1-104, as enacted by Laws of Utah 2011, Chapter 318
             25          61-1-106, as enacted by Laws of Utah 2011, Chapter 318
             26     

             27      Be it enacted by the Legislature of the state of Utah:



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Senate Committee Amendments 1-26-2012 kc/po
             28
         Section 1. Section 61-1-104 is amended to read:
             29           61-1-104. Reporter protected from adverse action -- Exceptions.
             30          (1) An employer may not take adverse action against an employee who is a reporter
             31      because of a lawful act of the employee, or a person authorized to act on behalf of the
             32      employee, to:
             33          (a) provide original information to the division or commission in accordance with
             34      Section 61-1-103 ;
             35          (b) initiate, testify in, or assist in any investigation, judicial action, or administrative
             36      action based on or related to original information provided to the division or commission;
             37          (c) disclose information required or protected under:
             38          (i) Sarbanes-Oxley Act of 2002, 15 U.S.C. Sec. 7201 et seq.;
             39          (ii) Securities Exchange Act of 1934, 15 U.S.C. Sec. 78a et seq.;
             40          (iii) 18 U.S.C. Sec. 1513(e);
             41          (iv) a regulation issued by the Securities Exchange Commission; or
             42          (v) this chapter or a rule made under this chapter.
             43          (2) Notwithstanding Subsection (1), an employee is not protected under this section if:
             44          (a) the employee knowingly or recklessly makes a false, fictitious, or fraudulent
             45      statement or misrepresentation;
             46          (b) the employee uses a false writing or document knowing that, or with reckless
             47      disregard as to whether, the writing or document contains false, fictitious, or fraudulent
             48      information;
             49          (c) the employee knows that, or has a reckless disregard as to whether, the disclosure is
             50      of original information that is false or frivolous; or
             51          (d) [the employer or entity in the covered judicial or administrative action that relates
             52      to the information provided by the reporter is subject to the jurisdiction of the Securities and
             53      Exchange Commission under] the employee S. [ qualifies for protection ] is protected .S from
             53a      adverse action as
             54      described in Section 21F of the Securities Exchange Act, 15 U.S.C. Sec. 78u-6, and regulations
             55      issued under that section.
             56          Section 2. Section 61-1-106 is amended to read:
             57           61-1-106. Award for reporter.
             58          (1) Subject to Section 61-1-108 and the other provisions of this section, the



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House Committee Amendments 2-3-2012 le/po

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Senate Committee Amendments 1-26-2012 kc/po
             59
     commission may award an award to one or more reporters who voluntarily provide original
             60      information to the commission or division that leads to the successful enforcement of a covered
             61      judicial or administrative action.
             62          (2) The division shall pay an award under this section from the fund.
             63          (3) (a) Subject to the other provisions of this section, the commission may determine
             64      the amount of award paid under this section, except that in determining the amount the
             65      commission S. H. [ [ ] shall [ ] ] [ may ] .H .S consider:
             66          (i) the significance of the original information provided by the reporter to the success
             67      of the covered judicial or administrative action;
             68          (ii) the degree of assistance provided by the reporter in relation to the covered judicial
             69      or administrative action;
             70          (iii) any costs of legal representation for the reporter in relation to the covered judicial
             71      or administrative action;
             72          (iv) the programmatic interest of the commission in deterring a violation of this chapter
             73      by making an award to a reporter who provides original information that leads to the successful
             74      enforcement of this chapter; [and]
             75          (v) whether, and the extent to which, the reporter or a legal representative of the
             76      reporter participated in internal compliance systems, including:
             77          (A) whether, and the extent to which, the reporter reported the possible securities
             78      violation through internal reporting, legal, or compliance procedures before, or at the same
             79      time as reporting the securities violation to the division or commission; and
             80          (B) whether, and the extent to which, the reporter assisted an internal investigation or
             81      inquiry concerning the reported securities violation; and
             82          [(v)] (vi) any other relevant factor that the division may establish by rule.
             83          (b) The aggregate amount of awards that the commission may award for a specific
             84      covered judicial or administrative action may not exceed:
             85          (i) the balance in the fund as of the date the awards are determined; or
             86          (ii) 30%, in total, of what is collected of the monetary sanction imposed in the judicial
             87      or administrative action.
             88          (4) The commission may not award a reporter under this section if the reporter:
             89          (a) is convicted of a criminal violation related to the covered judicial or administrative



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             90
     action for which the reporter otherwise could receive an award;
             91          (b) gains the original information through the performance of an audit of financial
             92      statements required under securities laws and for whom providing the original information
             93      would violate 15 U.S.C. Sec. 78j-1;
             94          (c) fails to provide the original information to the commission or division in
             95      accordance with Section 61-1-103 ;
             96          (d) knowingly or recklessly makes a false, fictitious, or fraudulent statement or
             97      misrepresentation;
             98          (e) uses a false writing or document knowing that, or with reckless disregard as to
             99      whether, the writing or document contains false, fictitious, or fraudulent information;
             100          (f) knows that, or has a reckless disregard as to whether, the disclosure is of original
             101      information that is false or frivolous;
             102          (g) has a legal duty to report the original information to the commission or division; or
             103          (h) [ the employer or entity in the covered judicial or administrative action that relates
             104      to the information provided by the reporter is subject to the jurisdiction of the Securities and
             105      Exchange Commission under] qualifies for an award as described in Section 21F of the
             106      Securities Exchange Act, 15 U.S.C. Sec. 78u-6, and regulations issued under this section.





Legislative Review Note
    as of 11-8-11 2:41 PM


Office of Legislative Research and General Counsel


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