The Securities and Exchange Commission has published proposed rules for a whistleblower program to reward individuals who provide the SEC with information leading to successful enforcement actions.
Under the proposed rules, a whistleblower is a person who provides information to the SEC relating to a potential violation of the securities laws.
To be considered for an award, a whistleblower must …
Voluntarily provide the SEC …
In general, a whistleblower is deemed to have provided information voluntarily if the whistleblower has provided information before the government, a self-regulatory organization or the Public Company Accounting Oversight Board asks for it.
… with original information …
Original information must be based upon the whistleblower’s independent knowledge or independent analysis, not already known to the Commission and not derived exclusively from certain public sources.
… that leads to the successful enforcement by the SEC of a federal court or administrative action …
A whistleblower’s information can be deemed to have led to successful enforcement in two circumstances: (1) if the information results in a new examination or investigation being opened and significantly contributes to the success of a resulting enforcement action, or (2) if the conduct was already under investigation when the information was submitted, but the information is essential to the success of the action and would not have otherwise been obtained.
… in which the SEC obtains monetary sanctions totalling more than $1 million.
For downloading the complete rules click here.
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