SEC Vote on Controversial New Whistleblower Rules Set for September 23, 2020
The U.S. Securities and Exchange Commission (“SEC”) will meet at 9 a.m. on September 23, 2020 to vote on proposed changes to the SEC’s highly successful Dodd-Frank Act whistleblower reward program. If approved as originally proposed, the changes could undermine vital whistleblower protections. The SEC has reviewed the proposed rule changes for over two years, and the vote has been cancelled on two prior occasions. Whistleblower advocates are closely monitoring this issue as the outcome next Wednesday’s meeting is undetermined.
Whistleblower attorney Stephen M. Kohn, who filed ten detailed comments on the proposed rules, and meet with four of the five Commissioners (including the Chairman) and the responsible staff members from the Office of General Counsel and the Whistleblower Office, stated:
“The Commissioners hold the future of the highly successful Dodd-Frank Act whistleblower program in their hands. The program has already recovered $2.5 billion in fines, returned $750 million to harmed investors, and paid whistleblowers over $500 million. All paid directly from fines and penalties collected in enforcement actions triggered by whistleblowers.”
“We urge the SEC to unanimously support its whistleblower program and use this rulemaking as an opportunity to improve its program. All of the initial proposals that would have undermined whistleblower protections should be voted down.”
According to the SEC Meeting announcement, the Commission will “consider whether to adopt amendments to the Commission’s rules implementing its whistleblower program that would enhance claim processing efficiency, and clarify and bring greater transparency to the framework used by the Commission in exercising its discretion in determining award amounts, as well as otherwise address specific issues that have developed during the whistleblower program’s history.”
Detailed information on the SEC’s proposed rule is linked here.
