The chairperson of the U.S. Securities and Exchange Commission (SEC), Chairman Gary Gensler, appeared on Yahoo! Finance on Sunday, March 13 to acknowledge the important role the SEC plays in shaping public policy. Just prior to Gensler’s appearance was coverage of a news reporter killed covering the war in Ukraine. There is a connection between the two.
For some whistleblowers, such as Russian citizens, or other individuals distrustful of government or fearing for their lives if their identity is revealed, they may find the safe space to present their disclosure to a trusted reporter, perhaps based on past reporting by the journalist. Why should a whistleblower tip presented to the SEC in the form of a news report be treated differently from a report that used a lawyer as the intermediary? More importantly, what public policy is furthered by penalizing whistleblowers who may trust the integrity of a news reporter and public pressure resulting from a public disclosure over the operations of a secretive government agency?
If the whistleblower passes the hurdle of being the actual original source of the information used by the SEC to sanction an entity or individual, and did so voluntarily, then the SEC should treat that whistleblower like other voluntary whistleblowers who seek a reward. Anything else represents a policy that disincentivizes instead of incentivizing individuals to take the steps that lead to the disclosure of original information to the SEC.