Quite some time ago, I fabulated that airline delays might constitute a violation of Securities and Exchange Commission Rule 21F-17. That rule provides that no person “may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation”. My theory, albeit fanciful, was that a delayed or cancelled flight could impede someone from meeting with the Commission staff. My point was, and is, that Rule 21F-17 is ridiculously over broad.
So when the SEC opens its purse to give us our reward,
thy conscience flies out.
Demonstrating that there are indeed more things than are dreamt of in this blog, the SEC last week announced that a NYSE listed company had settled charges that “it violated securities laws by using severance agreements that required outgoing employees to waive their rights to monetary recovery should they file a charge or complaint with the SEC or other federal agencies.” According to the Oxford English Dictionary, “impede” means “to retard in progress or action by putting obstacles in the way; to obstruct; to hinder; to stand in the way of”. A person is not retarded in progress, obstructed or hindered simply because she has given up the opportunity of a reward. Under the SEC’s theory, the fact that a reward is not offered by the company itself would constitute an impediment.
As Broc Romanek has pointed out, the SEC’s rule applies to private companies as well.
