On February 10, the U.S. Securities and Exchange Commission announced a pair of proposed changes to some of the rules that govern the agency’s successful whistleblower program.
The proposed amendments are to Exchange Act Rules 21F-3 and 6. If the amendments were to be adopted, they would ensure whistleblowers are more appropriately rewarded for their efforts in reporting securities laws violations, and would also be more incentivized to do so.
The proposed amendments to Section 21F aim to continue the trends of increased dollar amounts and more whistleblower reports by further incentivizing whistleblowers to come forward with information they have. After a record-breaking 2021 fiscal year for the program, the Commission clearly sees an opportunity to bring in more whistleblower reports and uncover more violations.
One amendment would allow awards for related actions where alternative award programs would be able to offer awards that are lower than what is allowed under the SEC’s whistleblower program.
The second amendment would eliminate the SEC’s authority to decrease whistleblowers’ possible monetary awards. It would clarify to whistleblowers that considerations of amending dollar amounts for awards will only be made to increase monetary awards, not to decrease them.
After proposing the amendments on February 10, there is a 60-day window for public comments. After that window expires, the Commission will vote on the amendments. If adopted, the SEC would immediately apply the changes to all new whistleblower award applications and any pending applications as well.
For more information about filing an SEC whistleblower program claim and what you can expect in the process, contact an experienced whistleblower lawyer at Kardell Law Group.