SEC Proposes Amendments to Whistleblower Rules

On June 28, 2018 the Securities and Exchange Commission announced proposed amendments to the rules governing its whistleblower program.   For example, the SEC is proposing changes that would give it greater latitude to adjust award amounts upwards or downwards within the standard payout of 10 to 30 percent of the monetary sanctions recovered.  The SEC is also inviting public comment on whether the SEC could propose a future rule to expand its discretion to make awards in certain cases, including when information from a whistleblower leads to a sanctions totaling less than $1 million.

The most controversial proposal allows the SEC to cap awards over $30 million if it does not believe that a larger award is necessary for the program to be effective. Former SEC Commissioner Kara M. Stein, an Obama appointee, opposed this amendment in a public statement, arguing that the $30 million cap is arbitrary and that there is a no data pointing to diminishing returns above $30 million. Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, also opposed the change. He argued in a public comment to the SEC that larger whistleblower awards send a stronger message to potential malefactors and pointed to a lack of concern for excessive rewards in relevant legislative history.

According to the SEC, original information provided by whistleblowers has led to enforcement actions in which it has ordered over a billion dollars in financial remedies, and as a result of which it has paid over $300 million to whistleblowers, If you believe you have a tip under the SEC Whistleblower Program, contact attorney Ian McLoughlin at, or call (617) 439-3939 or (800) 287-8119.  Alternately, click here to contact us through our website.