The SEC’s Whistleblower Rule helps protect high street consumers, investors, and families from securities scammers, scammers, and scam artists

WASHINGTON, DC– Stephen Hall, Legal Director and Securities Specialist at Better Markets, issued the following statement in response to the Securities and Exchange Commission’s (SEC) adoption of a final Whistleblower Rule addressing two erroneous provisions written under the previous administration were canceled:

“The SEC’s whistleblower program has been an extremely effective enforcement tool in the fight against fraud and other illegal conduct. It has emboldened and protected insiders who often uncover complex and hard-to-discover corporate schemes, and that has helped the SEC catch the lawbreakers. The facts speak for themselves: the program has awarded well over $1 billion to hundreds of individuals in exchange for information, resulting in $5 billion in fines and over $3 billion in confiscation of ill-gotten gains of which more than $1.3 billion has been or is expected to be returned to investors.

“The 2011 whistleblower rule worked admirably, but the previous government foolishly weakened it, making awards less secure and possibly lower. This reduced the incentives for insiders with knowledge of securities fraud to come forward in the face of potentially disastrous personal and financial consequences. The SEC has rightly responded with an effective solution, and we applaud them for doing so.

“As we requested in our comment letter, the new provisions clarify that the Commission may only consider the dollar amount of an award for the purpose of increasing, not decreasing, the amount.” In addition, they allow the Commission to provide an award for a related action that might otherwise be covered by an alternative whistleblower scheme, even if, in certain circumstances, the alternative whistleblower scheme has the more direct or relevant link to the related action .

“These changes will encourage more insiders to expose corporate crime and will help protect the investments and retirement plans of Main Street consumers, investors and families from crooks, scammers and scam artists.”

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Better Markets is a nonprofit, nonpartisan, independent organization founded to advance public interest in financial markets, support Wall Street financial reform, and make our financial system work again for all Americans. Better Markets works with allies – including many in the financial community – to promote pro-market, pro-business, and pro-growth policies that help build a stronger, more secure financial system that protects and nurtures Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.