The SEC has proposed to amend its whistleblower rules in ways that exacerbate a continuing clash among Democratic and Republican commissioners over rolling back SEC rules adopted under President Donald Trump.

SEC Chair Gary Gensler promoted the latest proposals as helping to “ensure that whistleblowers are both incentivized and appropriately rewarded for their efforts in reporting potential violations of the law to the Commission.” Commissioner Hester Peirce, a Republican appointed by Trump, lamented that the proposals are “an imprudent use of our resources.”

The first proposal would let the SEC pay whistleblower awards for certain actions that other federal agencies bring in cases where those awards might otherwise be paid under the other entity’s whistleblower program. Gensler has explained that this “rule change is designed to ensure that a whistleblower is not disadvantaged by another whistleblower program that would not give them as high an award as the SEC would offer.”

The second proposal would let the SEC consider the dollar amount of a potential award for the limited purpose of increasing the award amount and eliminate the SEC’s authority to consider the dollar amount of a potential award for the purpose of decreasing the award. Gensler has said that “[t]his would give whistleblowers additional comfort knowing that the SEC could consider the dollar amount of the award only in such cases.”

Peirce dissented. As for the proposals per se, she condemned them as “...

Read Full Story: https://www.jdsupra.com/legalnews/sec-whistleblower-proposals-continue-4822264/