A Law360 article titled Whistleblower Attorneys Cheer SEC’s Tipster Rule Reboot quotes SEC whistleblower lawyer Jason Zuckerman about the amendments to the rules governing the SEC whistleblower program that the Commission adopted on August 26, 2022:
Jason Zuckerman, a whistleblower attorney with Zuckerman Law, told Law360 that Friday’s development is a “big win” for whistleblowers, noting that the 2020 amendments had “risked dissuading whistleblowers from coming forward.”
The amendments would have “injected uncertainty” into the program by allowing the SEC to arbitrarily reduce large awards, and risked undermining the program by curtailing whistleblowers’ eligibility for related actions, he said.
“The purpose of the program is to incentivize whistleblowers to take the massive risks entailed in providing high-quality disclosures that enable the SEC to halt fraud, protect investors, promote market integrity, and hold fraudsters accountable,” Zuckerman said in an email.
Consistent with the text of the statute and Congressional intent, the August 26 amendments clarified that the SEC will not consider the dollar amount of a potential award for the limited purpose of increasing an award (not for the purpose of reducing an award). In addition, the final rule rescinds a 2020 amendment restricting whistleblowers’ eligibility for related action awards.
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