Want to blow the whistle? The SEC and CFTC might pay you up to 30% of the damages
Just this past Thursday, the SEC unveiled its proposed “Reward for Whistleblowing to the SEC and Prohibition Against Retaliation (Section 922).” Under SEC will be required to pay a reward to individuals who provide original information to the SEC which results in fines of over $1 million. The award will range from 10 to 30 percent of the amount recouped. Not too shabby when the previous limit was a max 10 percent. And most whistleblowers got nothing.
If you care to read the document, the SEC’s rules can be downloaded here: WhistleblowerProvisionsFinReformBill-HR4173.
A sidenote: insiders at ratings agencies (NRSROs is their horrible acronym) would now also be covered under the proposed whisteblower protection. Watch out Moody’s, Fitch, S&P and the like when the next housing boom goes bust. And the CFTC has proposed similar rules, likely because they will now oversee the previously unregulated swaps and over-the-counter derivatives market, all ripe for fraud. Thank you Goldman Sachs and John Paulson.
Excellent summary of who is not eligible for rewards via HousingWire. The SEC’s rules –and they are just proposed rules at this point — claim that whistleblowers cannot receive a reward if:
- they provide information after the SEC has already made a demand from a company
- they provide information legally protected by attorney-client privilege or securities laws
- are legal, compliance, audit, supervisory or governance personnel with whom the information was trusted in order to find a valid solution
- they obtained the information in violation of state or federal criminal law.
Ready…. set…. BLOW.