The National Whistleblower Center ("NWC") urged the SEC to extend the comment deadline on a proposal amending the SEC whistleblower program. The proposed amendments would limit who is eligible for awards based on an independent analysis and would allow the SEC to reduce the amount of whistleblower awards in large cases.
The NWC requested "full and complete transparency" as to why the SEC proposed this rule and what lobbying efforts were involved. The NWC expressed concern given the similarity between the proposal and the U.S. Chamber of Commerce's policy positions. The NWC noted that the Chamber submitted proposals for years to cap whistleblower rewards - which Congress repeatedly rejected. The NWC complained that the SEC failed to release any materials concerning the proposal in response to a FOIA request the NWC made earlier this year.
The NWC further commented that capping awards available to whistleblowers would be "highly destructive." The NWC also criticized the SEC proposed guidance regarding what constitutes "independent analysis" under the rules.
The comment deadline expired on September 18, 2018 and has not been extended by the SEC.
Commentary / Kyle DeYoung
The NWC's criticisms of the SEC's proposed amendments to the whistleblower program rules are no surprise. The proposed amendments include important changes to the whistleblower program that would limit who is eligible for awards based on independent analysis and could significantly reduce the size of whistleblower awards in the largest cases.