SEC

Whistleblowers now have more reasons to come forward after SEC changes rules

It’s now a bit more lucrative to call attention to a company’s wrongdoing.
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Whistleblowers who help uncover fraud and crimes might be eligible for bigger, broader payouts under new SEC rules.

The SEC announced late last week that it will start paying whistleblowers in non-SEC actions in “additional circumstances.” The agency can now add to (but not decrease) whistleblower payouts—arranged with other federal agencies, for instance—in a bid to encourage more whistleblowing.

The new rules expand the circumstances in which the SEC can pay out financial rewards for whistleblowing, increasing the potential for larger compensation for whistleblowers.

“I think that these rules will strengthen our whistleblower program. That helps protect investors,” SEC Chair Gary Gensler said in a statement.

The SEC’s whistleblower program was expanded in 2010 as part of the Dodd-Frank Act and now allows the SEC to pay financial rewards of up to 30% of collected fines to whistleblowers who voluntarily provide “original information to the Commission that led to the successful enforcement” of SEC actions. According to SEC, it has paid out more than $1.3 billion to whistleblowers since the program’s expansion.—DA

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