Scarinci Hollenbeck, LLC
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201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: July 18, 2018
The Firm
201-896-4100 info@sh-law.comThe Securities and Exchange Commission (SEC) is exploring ways to improve its whistleblower program in its first major overhaul since inception. The agency recently announced proposed rules would, among other things, provide the SEC with additional tools in making whistleblower awards, increase efficiencies in the whistleblower claims review process, and clarify the requirements for anti-retaliation protection under the whistleblower statute. The proposed changes come in the wake of the U.S. Supreme Court’s decision in , which held that Dodd-Frank’s anti-retaliation provision for “whistleblowers” does not extend to individuals who have not reported alleged misconduct to the SEC.
First launched in 2011, the SEC’s whistleblower program, provides a monetary incentive to corporate insiders and others having relevant information concerning potential securities violations to report their information to the Commission. Those who provide high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million are eligible for awards ranging from 10 percent to 30 percent of the money collected by the agency. The SEC’s latest whistleblower report, the SEC has ordered wrongdoers in enforcement matters to pay over $975 million in total monetary sanctions, including more than $671 million in disgorgement of ill-gotten gains and interest.
The SEC’s proposed changes will strengthen the program, as well as clarify existing rules.“Whistleblowers have made significant contributions to the SEC’s enforcement efforts, and the value of our whistleblower program is clear,” said SEC Chairman Jay Clayton. “The proposed rules are intended to help strengthen the whistleblower program by bolstering the Commission’s ability to more appropriately and expeditiously reward those who provide critical information that leads to successful enforcement actions. I look forward to public feedback and encourage everyone with an interest to give us their ideas on the proposed rules.”
Key changes proposed by the SEC include:
We will continue to track the status of the proposed rules and provide updates as they become available. If you have any questions or if you would like to discuss the matter further, please contact me, Paul Lieberman, or the Scarinci Hollenbeck attorney with whom you work at 201-806-3364.
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