The move came after three whistle-blowers received an $83 million payout in March. The hefty award was the largest payday in the history of the SEC’s whistle-blower program.
“The proposed rules are intended to help strengthen the whistle-blower program by bolstering the Commission’s ability to more appropriately and expeditiously reward those who provide critical information that leads to successful enforcement actions,” said SEC Chairman Jay Clayton.
Under the proposed rules, the SEC would be permitted to depart from its traditional analysis for determining the amount of an award in certain circumstances. The rule change would also effectively allow the SEC to limit whistle-blower awards to $30 million, according to the report.
Robert Jackson, one of the two commissioners who voted against the rule change, said the limit on awards could prevent some whistle-blowers from coming forward.
“Whistle-blowers are, in the parlance of economics, risk-averse individuals, and we’re asking them to put their livelihood on the line to help us enforce the law. Adding uncertainty to that process risks that would-be whistle-blowers will stay quiet,” he said.
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