The current leadership of the SEC overturned certain curbs on the monetary amount of whistleblower awards that were enacted by the preceding administration
The Securities and Exchange Commission (SEC) said last week that it had restored the potential for some whistleblower awards that were curbed under the prior SEC administration, prompting swift dissents from Republicans who had supported the rollbacks.
Whistleblower advocates strongly opposed changes adopted during former SEC Chairman Jay Clayton’s leadership which allowed the agency to decrease awards when the tips led to actions by other agencies. Under the newly approved rule changes the SEC Office of the Whistleblower cannot reduce awards in such cases, and will only allow discretionary increases.
The SEC Republican members argued that the Office of the Whistleblower fielded a record number of tips in 2020 under the rule that curbed outside awards without causing any visible harm to the whistleblowing program. The SEC Office of the Whistleblower, however, has previously linked that pandemic-year’s surge to the shift to remote operations that made it easier for employees to make claims.
The former chairman, prior to joining the SEC, had participated in a legal group study of the whistleblower award system that suggested limiting the program, which has paid $1.3 billion since it began in 2010. After initially proposing a cap on awards of more than $100 million, the agency pulled back the proposal under intense...
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