On September 23, the U.S. Securities and Exchange Commission (SEC) approved changes to its highly successful whistleblower program. On September 25, whistleblower attorneys Stephen M. Kohn and Siri Nelson, of the qui tam firm Kohn, Kohn & Colapinto, wrote the definitive analysis of the changes for The CLS Blue Sky Blog.
Kohn and Nelson cover the six major aspects of the rule changes, detailing the rules and their consequences for whistleblowers. They also indicate elements of the final rule changes that differ from those initially proposed in 2018, highlighting the ways in which the SEC listened to concerns raised by whistleblowers and their advocates. Kohn and Nelson additionally point to specific rule changes which they argue do not conform to the Dodd-Frank Act and thus may be challenged in court.
In summation of their piece, Kohn and Nelson write:
The September 23 decision yielded a number of positive outcomes. Many problematic provisions were abandoned or significantly modified. However, the few disappointing outcomes discussed above make clear that work still needs to be done to ensure that whistleblowers are fully protected and the intent of Congress is achieved. Additionally, by adopting rules contrary to the statutory intent and plain language of the Dodd-Frank Act, the commission has opened itself to litigation based on its change to the related action rule and the guidance provided concerning analysts.