(Reuters) – The US Securities and Exchange Commission on Wednesday will finalize new terms for its whistleblower bounty program, which will result in rewards being issued more quickly and some rewards rising in value, said officials of the agency.
They added that the amendments are intended to ensure that eligible whistleblowers automatically receive the current maximum allotment of 30% of the resulting fine, an assumption that is not the case under current rules.
The new terms, first proposed by the Agency in 2018, would give staff more leeway to distribute rewards under the program, taking into account a number of new factors.
These include the importance of the tipster's information; the level of assistance they offer the SEC; the severity of the alleged offense; and the whistleblower's involvement in internal compliance systems.
Even with these new considerations, SEC Chairman Jay Clayton told reporters that he expected most rewards to "remain unchanged or increase, and to be able to issue them more quickly." [1
There is also a relaxation of a proposal to introduce discretionary ceilings on bounties and to tighten the deadlines for formal submission of tips, as Reuters reported on Tuesday.
The agency had proposed requiring whistleblowers to submit their formal tip, a lengthy legal document required to claim bounty, within 30 days of first contacting SEC personnel. On Wednesday, the SEC will relax the proposed deadline in cases where the whistleblower had not been aware of the agency's formal filing rule.
The program attracts thousands of tips annually, public records show, overwhelming SEC staff that can take years to assess. all claims and issues awards.
The SEC will also vote to extend the "related actions" provision of the program, which allows awards to be distributed on behalf of other agencies, to include deferred prosecution agreements and non-prosecution agreements, as well as similar non-judicial settlements made by the Ministry of Justice.
The SEC will provide tipsters who would have been eligible if this rule had been in force when the program began in 2011 90 days to file a claim.
Whistleblowers were not previously eligible for awards in these cases, officials said. Catalog