The federal Securities and Exchange Commission (SEC or Commission), over the dissent of its lone Republican member, has published a proposed rule to scale back two provisions of the agency’s recently revised “Dodd-Frank” whistleblower bounty hunter regulations in an effort to increase the potential for whistleblowers to obtain large monetary awards.
In 2020, during the last year of the Trump Administration, the SEC promulgated a final rule which contained two provisions related to the Commission’s discretion in setting a whistleblower’s award amount that were designed to curb the potential for unwarranted windfalls. Opponents countered that these changes would instead serve as a disincentive for would-be whistleblowers.
Now under the leadership of the agency’s activist Democrat Chair Gary Gensler, the SEC is proposing to revise these two provisions to, in Mr. Gensler’s words, “help ensure that whistleblowers are both incentivized and appropriately rewarded.” Worth noting, the SEC is proposing these changes despite a 76% increase in the number of whistleblower tips and $564 million in awards being paid out in fiscal year 2021 under the 2020 regulatory revisions, more than the total amount of monetary awards handed out by the agency in all previous years combined.
Members of the Center for Workplace Compliance (CWC) can read more here.