June 27, 2022

Volume XII, Number 178

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June 27, 2022

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SEC Proposes Amendments to Whistleblower Program Rules, Which May Lead to More SEC Tips

On February 10, 2022, the U.S. Securities and Exchange Commission announced two proposed amendments to its whistleblower program rules.

As we previously reported here, a closely divided SEC adopted a final rule implementing several changes to its whistleblower program in September 2020.  On January 13, 2021, a whistleblower attorney filed a lawsuit in the U.S. District Court for the District of Columbia challenging various aspects of the final rule (our post on that case is here).  After SEC Chair Gary Gensler assumed office, he directed staff to consider revisions to two amendments that could have discouraged tips by allowing the SEC to (1) unilaterally deny “related action” awards where there is another applicable whistleblower award program, and (2) limit the size of some of the largest awards (see our post here).

In announcing the proposed amendments, Chair Gensler noted that “[t]hese amendments, if adopted, would help ensure that whistleblowers are both incentivized and appropriately rewarded for their efforts in reporting potential violations of the law to the Commission.”  He also said that the first proposed rule change was “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,” and that under the second proposed change, “the SEC could consider the dollar amounts of potential awards only to increase the whistleblower’s award.”

The SEC will vote on the proposed amendments after a 60-day public comment period.

© 2022 Proskauer Rose LLP. National Law Review, Volume XII, Number 48
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About this Author

Steven J Pearlman, Labor Employment Law Firm, Proskauer Law firm
Partner

Steven Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm's Whistleblowing & Retaliation Group, resident in the Chicago office. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination and harassment, wage-and-hour laws and breaches of restrictive covenants (e.g., non-competition agreements). He has successfully tried cases to verdict before judges and juries in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S....

312-962-3545
Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm
Associate

Pinny Goldberg is an associate in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims. 

In...

212.969.3074
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