The US Securities and Exchange Commission (SEC) announced yesterday that the authority has adopted two amendments to the rules governing its whistleblower program. The SEC has announced the amendments to incentivize whistleblower tips.
According to the details shared by the Commission, the first change in the rules will enable the authority to pay whistleblowers for their information and assistance in connection with non-SEC actions in additional circumstances.
As far as the second rule change is concerned, the new amendment has affirmed the authority of the SEC to consider the dollar amount of a potential award for the limited purpose of increasing an award.
The latest announcement from the Commission came after SEC gave a record amount to whistleblowers under its program. In February 2022, a whistleblower got $9.2 million under SEC’s new bounty rule.
“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,” said Gary Gensler, the Chairman of the SEC.
“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,” he added.
Whistleblower Program
In the latest press release, the SEC noted that it has awarded over $1.3 billion to whistleblowers under the program. The Commission said that the program has played an important role in the enforcement of federal securities laws.
