On February 10th, the SEC announced that it is proposing amendments to Rules 21F-3 and 21F-6 of the Exchange Act of 1934, which governs the SEC’s whistleblower program. Under the Exchange Act, monetary awards are issued to eligible whistleblowers who voluntarily report original information pertaining to a securities law violation that leads to the SEC’s success in obtaining a monetary order greater than one million dollars in a covered judicial or administrative action brought by the SEC. The valuable tips provided to the SEC help the agency fight wrongdoing and better protect investors and the marketplace.
The awards given to whistleblowers must be made in the amount no less than 10 percent, and no more than 30 percent, of what has been retrieved from monetary sanctions imposed in covered SEC and related actions. Whistleblowers who have received an award in a covered action also qualify for an award with regard to judicial or administrative actions based on the whistleblower’s same original information and brought by the US Department of Justice and other lawfully identified agencies or entities.
The proposed rules would impact the whistleblower program, certain conforming amendments, and technical corrections. If approved, the rules would implement substantial revisions to the SEC’s current whistleblower rules including:
- addressing instances when a whistleblower from the SEC’s program receives an award from another, non-SEC whistleblower program
- affirming the SEC’s authority to consider the dollar amount of a potential award for the limited purpose of increasing an award, but not to lower an award
Further details on the proposed rules and amendments is available on the SEC’s Proposed Changes to Whistleblower Program Rules fact sheet on sec.gov. For more information, contact Emily Pasquinelli, Office of the Whistleblower, Division of Enforcement, at (202) 551-5973; Hannah W. Riedel, Office of the General Counsel, at (202) 551-7918, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The public may submit feedback on matters related to the proposal during the comment period, which will remain open until April 11, 2022. For more information on the comment period and instructions on how to respond, see the Proposed Rule on the SEC’s website.
Sources:
SEC Proposed Changes to Two Whistleblower Program Rules (sec.gov)
