SEC Proposes Amendments to Whistleblower Program
The SEC proposed several rule amendments to its whistleblower program under Exchange Act Section 21F, including clarification of existing rules and technical amendments. In addition, the SEC issued proposed interpretive guidance on the terms "independent analysis" and "unreasonable delay" under Exchange Act Rules 21F-4 and 21F-6, respectively.
The rule amendments would:
allow awards based on deferred prosecution agreements ("DPAs") and non-prosecution agreements ("NPAs") entered into by the DOJ or a state attorney general in a criminal case, or settlement agreements entered into by the SEC outside of a judicial or administrative proceeding;
enable the SEC to adjust the award percentage in certain circumstances;
remove the potential double recovery under the definition of "related action";
establish a uniform definition of "whistleblower" in response to the Supreme Court's decision in Digital Realty Trust, Inc. v. Somers;
prevent repeat whistleblower submitters from "abus[ing] the award application process"; and
enact summary disposition procedures for certain types of likely denials.
The proposed interpretive guidance makes clear that in order to qualify as "independent analysis," a whistleblower's submission must provide "evaluation, assessment, or insight" beyond what would otherwise be "reasonably apparent" to the SEC from public information.
Finally, the SEC requested public comment and data on a "broad range of issues" relating to the SEC whistleblower program. Comments must be submitted 60 days after publication in the Federal Register.
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