The proposed amendments to the rules governing the whistleblower program, if adopted, would reverse prior amendments and provide further and significant financial incentives for whistleblowers to report potential violations to the SEC.
On February 10, 2022, the SEC voted to propose two significant changes to the rules governing its whistleblower program that would reverse amendments to the same rules adopted by a divided Commission in 2020. First, the proposed amendment to Rule 21F-3 would allow the SEC to pay whistleblower awards for certain actions brought by other entities, including designated federal agencies, in cases where those awards might otherwise be paid under the other entity's whistleblower program. This change would ensure that a whistleblower is not disadvantaged by another whistleblower program that would award them less than the SEC could offer. Second, the proposed amendment to Rule 21F-6 would affirm the SEC's authority to consider the dollar amount of a potential award for the limited purpose of increasing the award amount and "it would eliminate the Commission's authority to consider the dollar amount of a potential award for the purpose of decreasing an award."
In a statement accompanying the announcement, SEC Chair Gary Gensler said: "I support these amendments because, if adopted, they would help ensure that whistleblowers are both incentivized and appropriately rewarded for their efforts in reporting potential violations of the law to the...
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