With approximately $1.2 billion paid to whistleblowers and nearly $5 billion in financial remedies collected, the Securities and Exchange Commission’s (SEC) whistleblower program is considered the gold standard by many.
But there are weak points, even the program’s biggest fans would agree.
One issue is how long it takes between the SEC ending an investigation and awarding a whistleblower, as the average wait time is four years. Another is that whistleblowers receive protection from retaliation only if they report their claim to the SEC or certain designated officials—and not if they report the issue to their supervisor at their employer.
Two senators seek to address both matters with the introduction of a new bill, the “SEC Whistleblower Reform Act of 2022,” on Thursday. Sens. Chuck Grassley (R-Iowa) and Elizabeth Warren (D-Mass.) propose to shorten the wait time for a whistleblower to receive a payout by requiring the SEC to issue an initial ruling on a claim within one year of the deadline to file the claim.
“While I’m pleased that the program has been an overwhelming success, we can still do more to strengthen protections, speed up claim processing, and close other loopholes,” Grassley said in a joint press release.
Added Stephen Kohn, chairman of the National Whistleblower Center and founding partner of whistleblower law firm Kohn, Kohn & Colapinto, “This law is urgently needed. Whistleblowers who have been fired often have to wait over four years for any...
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