Summary

Section 21F of the Securities Exchange Act of 1934 (the Exchange Act) governs the Securities and Exchange Commission (the SEC or the Commission) whistleblower program, which pays awards to eligible whistleblowers who voluntarily provide the SEC with original information relating to a violation of federal securities laws that leads to successful enforcement proceedings in certain judicial or administrative actions or non-SEC related actions. The SEC recently adopted two amendments to make incremental changes to its whistleblower program rules.

The Upshot

• Amended Rule 21F-3 expands the scope of non-SEC “related actions” that may be deemed eligible for an award under the whistleblower program. The Commission now has the authority to pay awards to whistleblowers even if another award program has the more direct or relevant connection to the action.
• Amended Rule 21F-6 affirms the Commission’s authority to consider the dollar amount of a potential award for the limited purpose of increasing an award, but eliminates the Commission’s authority to consider dollar amount for the purpose of decreasing an award. This amendment clarifies a 2020 amendment that created uncertainty regarding the Commission’s authority to consider the dollar amount of an award when making an award determination.

The Bottom Line

Since 2010, enforcement matters brought using information provided by whistleblowers have resulted in orders for more than $5 billion in total monetary sanctions and $1.3...

Read Full Story: https://www.jdsupra.com/legalnews/sec-amends-whistleblower-program-rules-9058...