The Securities and Exchange Commission (SEC) has approved rules that will entitle whistleblowers to receive 10 to 30 percent of the money they help the SEC collect through enforcement actions.
The SEC has rejected requests by business groups to require whistleblowers to notify the companies they are accusing of wrongdoing, prior to going to the SEC, to give them an opportunity to correct the allegations. Business groups and some Republican commissioners felt that by allowing whistleblowers to bypass companies' internal compliance programs, the agency might allow problems to become worse and that the SEC would be flooded with tips not related to securities enforcement.
The SEC commissioners were told by enforcement director Robert Khuzami that he saw no evidence of such problems and that the agency is already seeing an increase in high quality, well documented tips.
The biggest concession to corporations is that the SEC could give whistleblowers credit for taking their allegations to the company's own compliance program when determining the size of the reward.
Source:
SEC approves new rewards for whistleblowers, The Washington Post, May 25, 2011
