SEC Fines CBRE Over Alleged Whistleblower Rule Violation

CBRE will pay $375,000 to settle alleged violations of the U.S. Securities and Exchange Commission’s whistleblower protection rule.

An SEC investigation found that between 2011 and 2022, Dallas-based CBRE required its employees to sign releases stating they hadn’t lodged complaints against the company with a federal agency. Employees were required to sign the waiver in order to receive separation pay. The requirement essentially discouraged potential whistleblowers from reporting grievances to the SEC, the Dallas Business Journal reported.

CBRE and its subsidiaries stopped using the waiver after it learned of the SEC’s investigation, and the civil penalty takes into account the firm’s cooperation and prompt remedial actions.

The SEC’s whistleblower protection rule safeguards individuals who report potential violations, and it also prohibits companies from obstructing such reporting.

“It is critical that employees are able to communicate with SEC staff about potential violations of the federal securities laws without compromising their financial interests or the confidentiality protections of the SEC’s whistleblower program,” Eric Werner, regional director of the SEC’s Fort Worth office, told the outlet.

The company clarified the whistleblower protection terms by speaking with more than 800 employees who had signed the release. CBRE neither admitted nor denied the allegations but agreed to cease and desist from violating the rule.

CBRE projected that its earnings would drop 20 to 25 percent this year, according to its second-quarter earnings report.

While the firm anticipates growth this year in its loan servicing, property management, investment management and workplace solutions ventures, the firm’s income from property leasing and sales is down compared to last year.

CBRE has about 115,000 employees in over 100 countries. The company moved its headquarters from California to Dallas in 2020. It was planning to build a headquarters building in Uptown, but it has since put those plans on hold indefinitely, instead leasing 67,000 square feet at 2121 Pearl Street.

—Quinn Donoghue