Prior to the meeting a major grass roots initiative urged Commission representatives to meet with the whistleblower qui tam lawyers from the NWC, who are internationally recognized experts on qui tam whistleblower award laws. For example, in the past two months Kohn made a major presentation on the use of whistleblower reward laws at an international anti-money laundering conference in London, he provided testimony to the European Parliament on whistleblower qui tam and reward laws, and he delivered the keynote address at the International Annual Conference on Integrity, held in Lima, Peru and attended by approximately 2000 auditors and anti-corruption government officials from throughout South and Latin America.
Here in the United States, the SEC received over 3,490 letters directly from the NWC’s Action Alert Network members urging the SEC to reject the proposed whistleblower rewards cap and urging the Commissioners to meet directly with the NWC experts.
At the meeting the NWC delivered two comprehensive reports on the importance of the SEC program, and the destructive impact the proposed rule would have on the program. Mr. Kohn also proposed a “compromise” solution to some of the issues identified in the Proposed Rule. Kohn urged the Commission to reject any form of “cap,” and explained how whistleblower reward programs that instituted a “cap” all failed. He also explained how highly compensated Wall Street employees would not risk their careers if they believed the SEC may limit their rewards.
Kohn also explained how the SEC lacked the statutory authority to limit rewards based on the amount of funds available to pay rewards in the Investor Protection Fund. However, he explained that the SEC did have the authority to stagger the payout of larger awards over time, if the Protection Fund lacked assets. After the meeting a formal proposal was submitted to the SEC staff and placed on the public record. The two NWC reports were also placed on the public record.
After the meeting Kohn, who represents leading qui tam and corporate whistleblowers from around the world, including, Mr. Howard Wilkinson (who exposed the largest money laundering scheme in history – $230 billion), stated: “The SEC responded to the letters of support from the NWC’s action alert program, and agreed to meet with us and discuss the proposed rules. The staff listened carefully, and we hope will ensure that the SEC’s program is enhanced by any finalized reforms, not destroyed.”
Read NWC’s reports given to the SEC here:
- Assessing Whistleblower Reward Incentives and Caps: What the Data Demonstrates
- When Whistleblowers Get Rewards: Assessing the Results of the SEC Whistleblower Reward Program
- Ensuring the Integrity of The Investor Protection Fund While Timely and Properly Paying Whistleblower Claims
Previous posts on this topic:
- SEC Receives Extensive Criticism in Comments on Proposed Changes to Whistleblower Program
- Whistleblower Advocacy Group Requests SEC Extend Public Comment Period on Controversial Changes to Whistleblower Program
- Action Needed to Protect SEC Whistleblower Program
- Proposed SEC Rule Will Hurt Whistleblower Program