The Securities and Exchange Commission (SEC) adopted two amendments designed to strengthen its whistleblower program.
One of the amendments allows the SEC to pay whistleblowers for their information and assistance in connection with non-SEC actions in additional circumstances.
The other rule change affirms the Commission’s authority to consider the dollar amount of a potential award for the limited purpose of increasing an award but not lowering an award.
“In 2010, Congress under the Dodd-Frank Act directed the SEC to establish a whistleblower program, which to date has greatly aided the Commission’s work to protect investors,” SEC Chair Gary Gensler said. “Today’s amendments enact two changes to help enhance the whistleblower program. The first amendment expands the circumstances in which a whistleblower who assisted in a related action can receive an award from the Commission for that related action rather than from the other agency’s whistleblower program. Under the second amendment, when the Commission considers the size of the would-be award as grounds to change the award amount, it can do so only to increase the award and not to decrease it. I think that these rules will strengthen our whistleblower program. That helps protect investors.”
The SEC’s whistleblower program was established in 2010 to encourage individuals to report tips to the Commission to help the agency detect wrongdoing and better protect investors. Since the program’s inception, enforcement matters brought using original information from whistleblowers have resulted in orders for more than $5 billion in total monetary sanctions. Further, the Commission has awarded more than $1.3 billion to meritorious whistleblowers under the program.
These new whistleblower rule amendments will become effective 30 days after publication in the Federal Register.