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Could The SEC Ask Airlines To Produce Data On Delayed And Canceled Flights?
Thursday, April 9, 2015

The following story is FICTION.  It was imagined following the SEC’s recently settled action against KBR, Inc.

Airlines were caught completely off guard yesterday by SEC letters asking that they produce five years of data on delayed and canceled flights to the nation’s capital. The SEC’s action was a continuation of the agency’s inquiry into potential violations of its whistleblower protection rules.  An imaginary source explained that Rule 21F-17 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 . . .”.  According to this fictional source, the SEC wants the data because it is possible that one or more whistleblowers were on flights that had been delayed or canceled.  She observed:

We’ve looked at the dictionary definition of “impede”.  According to the Oxford English Dictionary, it means “to retard in progress or action by putting obstacles in the way; to obstruct; to hinder; to stand in the way of”.  That is exactly what happens when an airline flight is delayed or canceled.  As soon as we complete this inquiry, we intend to target cellular phone providers who drop cell phone calls.

A nonplussed and invented airline official protested that the airlines certainly didn’t intend to impede any whistleblower reports.  The non-existent source responded:

Do you see the words “intentionally” or “knowingly” in the rule?  The SEC  just settled an enforcement action against KBR, Inc. without any proof that the company intended to impede whistleblower reporting.

Asked what the airlines could do, one fictive attorney advised that they could limit their liability for impeding whistleblowers by improving their on-time performance.

The point of the foregoing fable is that Rule 21F-17 is so broadly written that it could be applied to virtually anyone regardless of  intent

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