9/23/20 SEC Amends Whistleblower Award Program rules
https://www.littler.com/publication-press/publication/sec-amends-whistleblower-award-program-rules
Maximum Statutory Award Amount Presumption for Awards Less than $5 Million
One of the key new amendments includes a mechanism for whistleblowers with potential awards of less than $5 million to qualify, subject to certain criteria, for a presumption they will receive the maximum statutory 30% award amount. The goal of this amendment is to increase the pace with which the SEC processes smaller awards.
Discretion in Determining Percentage Terms, Dollar Terms, Combination
Notably, the SEC excluded from the new rules a 2018 proposal that would have granted the SEC discretion to reduce the highest monetary awards—more than $30 million—to whistleblowers so that awards would not exceed what is “reasonably necessary” to reward tipsters and incentivize future whistleblowing. Instead, the SEC has taken a nuanced, alternative approach, which gives it discretion to take into account the award amount in determining percentage terms, dollar terms, or some combination, without any particular monetary floor.
Allowing Awards Based on DPAs, NPAs, or Settlement Agreements
Another amendment refines the definition of “action” to include deferred prosecution agreements, non-prosecution agreements, and settlement agreements entered into by the SEC outside of the context of a judicial or administrative proceeding to address violations of the securities laws. This amendment is intended to “ensure that whistleblowers are not disadvantaged because of the particular form of an action that the SEC or DOJ may elect to pursue.”