The US Securities and Exchange Commission changed its whistle-blower rules to give the agency more leeway to pay out hefty awards.
Wall Street’s main regulator will be able to pay tipsters who help other government agencies that don’t have whistle-blower reward programs like the SEC, the agency said in a Friday statement. Under rule changes, officials will also lose some discretion to reduce the size of an award based on its size.
Congress established the SEC whistle-blower program after the financial crisis and the agency has paid out more than $1.3 billion since issuing its award in 2012. All payments are made out of an investor protection fund that’s refilled by monetary penalties paid to the regulator. Whistle-blowers are eligible for awards ranging from 10% to 30% of the amount of money collected in enforcement cases where penalties exceed $1 million.
In a statement, SEC Chair Gary Gensler, a Democrat, said the agency’s move would help protect investors.
Meanwhile, Mark Uyeda, one of the agency’s two Republicans, said he opposed the amendments because they too quickly reversed changes passed during the Trump administration, creating regulatory uncertainty.
Photo: A flag outside the U.S. Securities and Exchange Commission headquarters in Washington, D.C./Bloomberg
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