According to the new proposal, “In the context of potential awards that could yield total collected monetary sanctions of at least $100 million, the proposed rules would authorize the commission in its discretion to adjust the award percentage so that it would yield a payout (subject to the 10 percent statutory minimum set by Dodd-Frank) that does not exceed an amount that is reasonably necessary to reward the whistle-blower and to incentivize other similarly situated whistle-blowers. However, in no event would the award be adjusted below $30 million. This proposed amendment is intended to make sure that the commission is a responsible steward of the public trust while continuing to provide strong whistle-blower incentives,” the SEC said.
Since the other 60 percent of whistle-blower awards are for less than $2 million, the SEC also wants to be able to increase awards, at its discretion. “In the context of potential awards that could yield a payout of less than $2 million to a whistle-blower, the proposed rules would authorize the commission in its discretion to adjust the award percentage upward under certain circumstances (subject to the 30 percent statutory maximum) to an amount up to $2 million,” the SEC said.
The proposal also seeks to eliminate potential double recovery that could occur if a whistle-blower was entitled to receive multiple recoveries for the same information from different whistle-blower programs.
Kohn said he looks forward to meeting with SEC commissioners to fully explain the problems triggered by the proposed rule. “We hope the commissioners will carefully listen to the information provided by the whistle-blower community and are not overly swayed by the large corporations and financial institutions that will be the primary beneficiaries of this proposed rule,” Kohn said.
Bloomberg News reporter Ben Bain contributed to this report.