The Securities and Exchange Commission (SEC) is considering changes to its billion-dollar whistleblower program with two amendments.
First, a tweak to Rule 21F-3 would give the agency the discretion to pay whistleblower awards for certain actions brought by other entities.
Currently, a whistleblower who obtains an award based on an SEC action may also be eligible for an award based on monetary sanctions collected in an action brought by other statutorily delineated authorities.
Pursuant to the proposal, the agency would be allowed to make an award for a related action that might otherwise be covered by an alternative whistleblower program—even where the other program has a more direct or relevant connection to the related action.
If enacted, the rule change could be implemented in different ways. For example, if a claimant filed a related-action award application, and the alternative award program is not comparable to the SEC program (because the other award range is more limited, awards are subject to a cap or the other award program is discretionary, not mandatory), then the agency would treat the other action as “related,” regardless of whether the alternative award program had a more direct or relevant connection.
The maximum award the agency could pay would not exceed $5 million.
Some of the other options include allowing the whistleblower to make a choice (whether to receive a related-action award from the SEC or the alternative award program) once the award amount...
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