The U.S. Securities and Exchange Commission (SEC) recently proposed some changes to its whistleblower program that could potentially affect compensation received by whistleblowers through the program.
Under the current rules, whistleblowers can perceive anywhere from 10 to 30 percent of penalties the SEC collects when the penalties in the case exceed $1 million. However, the program. However, the program was slightly peeled back during the Trump administration.
Background to the changes
There were several key changes that occurred during the last administration to the whistleblower program. Staff at the SEC began to have greater discretion over the amount of the reward. Even though the statute had mandated the amount of the money given in the award, a cap was implemented, also limiting recovery in related actions.
Rule changes under the prior administration also created some additional hurdles to recovery for whistleblowers, including requirements for analyzing “independent evidence.”This resulted in the perception that the SEC was not as receptive to whistleblowers, even as more whistleblower reports than ever continued to come in.
Changes to the rule would restore the original intent of easier recoveries with more predictable recovery amounts. The amount would still depend on factors such as the usefulness and timeliness of the information and internal reporting and other such processes followed.
For more information about the SEC’s whistleblower program and how to file a tip through the SEC’s Office of the Whistleblower, contact an experienced whistleblower lawyer at Kardell Law Group.