Employees in Alabama may benefit from learning about two amendments that the Security Exchange Commission, or SEC, proposed this past February for the whistleblower rewards program rules.
According to the SEC Chair, the proposed amendments are designed to help ensure that whistleblowers are incentivized and properly rewarded for their efforts in reporting potentially unlawful violations to the SEC.
First amendment proposed
The first proposal is designed to help ensure that whistleblowers are not disadvantaged by other whistleblower programs that fail to offer as high of a reward as the SEC. The proposed change to Rule 21F-3 is designed to allow the SEC Commission to pay awards for certain actions brought forth through other entities, including designated federal agencies, in cases where the awards would otherwise be paid by the other entity’s reward program.
Second amendment proposed
The second rule change would allow the SEC to only consider the dollar amount of the potential award to increase the amount of the whistleblower’s reward. The proposed change to Rule 21F-6 would affirm the Commission’s authority to consider award amounts for the limited purpose of increasing the amount and eliminate the Commission’s authority to consider an amount for decreasing an award. With these amendments, the SEC will no longer be limiting payouts for whistleblower claims.
Proper compensation for whistleblowers
The rules adopted in September 2020 under the Trump Administration were revised to address concerns that they were discouraging tipsters from sharing valuable information. The proposed amendments will help ensure that the SEC is compliant with the law and pays whistleblowers appropriately when information results in triggering multiple fines under various laws. The proposed rule change should also provide whistleblowers with comfort knowing that the SEC is interested in increasing the amount awarded for valuable information.