The U.S. Securities and Exchange Commission (SEC) announced that it adopted two amendments to its whistleblower program’s rules. The first rule change allows the Commission to pay whistleblowers for their information and assistance in connection with non-SEC actions in additional circumstances. The second rule 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.
Since the Whistleblower program’s inception, enforcement matters brought using original information from meritorious whistleblowers have resulted in orders for more than $5 billion in total monetary sanctions. The Commission has awarded more than $1.3 billion to meritorious whistleblowers under the program.
“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,” “Today’s amendments enact two changes to help enhance the whistleblower program.”SEC Chair Gary Gensler.
Specifically, the SEC amended Rule 21F-3 to allow the Commission to pay whistleblower awards for certain actions brought by other entities, including designated federal agencies, in cases where those awards might otherwise be paid under the other entity’s whistleblower program. The amendments allow for such awards when the other entity’s program is not comparable to the Commission’s own program or if the maximum award that the Commission could pay on the related action would not exceed $5 million.
Further, the amendments affirm the Commission’s authority under Rule 21F-6 to consider the dollar amount of a potential award for the limited purpose of increasing the award amount, and it would eliminate the Commission’s authority to consider the dollar amount of a potential award to decrease an award.