The Securities and Exchange Commission announced that Virginia-based technology company NeuStar Inc. agreed to pay a penalty of $180,000 to settle charges involving its severance agreements that impeded at least one former employee from communicating information to the SEC.

According to the SEC order, NeuStar violated a whistleblower protection rule in the federal securities laws by routinely entering into severance agreements containing a broad non-disparagement clause forbidding former employees from engaging with the SEC and other regulators in “any communication that disparages, denigrates, maligns or impugns” the company. These agreements were used with at least 246 departing employees from Aug. 12, 2011 to May 21, 2015, and stated that former employees could be compelled to forfeit all but $100 of their severance pay for breaching the clause.

After the SEC began investigating, NeuStar voluntarily revised its severance agreements and consented to the SEC’s cease-and-desist order without admitting or denying its findings. The company also agreed to make reasonable efforts to inform the former employees who signed the agreements that NeuStar does not prohibit them from communicating any concerns about potential violations of law or regulation to the SEC.

“Public companies cannot use severance agreements to impede whistleblowers from communicating with the SEC about a possible securities law violation,” said Antonia Chion, associate director of the SEC’s Enforcement Division, in a statement. “NeuStar’s severance agreements broadly prohibited former employees from communicating any disparaging information about the company to the SEC, and unsurprisingly at least one former NeuStar employee was chilled by such language.”

“This action demonstrates our continued strong enforcement of this critically important whistleblower protection rule and underscores our ongoing commitment to ensuring that potential whistleblowers can freely communicate with the SEC about possible securities law violations,” stated Jane Norberg, chief of the SEC’s Office of the Whistleblower.

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