SEC Proposes Whistleblower Rule

The Dodd-Frank Act authorized the Securities and Exchange Commission to increase rewards for whistleblowers, and Bloomberg reports that the SEC has proposed a rule outlining the higher stakes. In a 5-0 vote, commissioners put forth a proposal whereby, in cases where fines or ill-gotten gains exceed $1 million, whistleblowers can receive up to 30 percent. Currently, awards are limited to 10 percent and to insider trading cases. Corporations have expressed concern that greater rewards may incentivize employees to go directly to the SEC, rather than use intra-organizational hotlines and compliance departments.