For nearly three years, the Securities and Exchange Commission has been telling everyone who would listen that it would prefer to not have to do anything. Whistleblowers have been among those not listening: While the SEC has been warning it doesn’t plan on being this generous forever, in hopes of giving itself less to do by way of sifting through thousands of allegations by disloyal employees, it hasn’t stopped the torrent of complaints pouring into its office.

Until now.

The SEC received 5,212 tips during the 2019 fiscal year ended in September, down 1% from a year earlier, the agency said Friday in an annual report to Congress. The largest drop was in tips about potential cases of fraud in securities offerings, which had spiked the previous year…. The SEC could begin imposing limits on its largest awards under a proposal introduced last year that would give the agency discretion to scale back awards above $30 million….

“I have many clients who are deeply concerned about this—people who have come forward already and are really concerned that the rules are changing on them midstream,” she said.

“Then there are others who are contacting us at the beginning of the process and they’re raising this issue as a concern also,” she added. “And it’s definitely coloring their decision whether to proceed and become an SEC whistleblower.”

Thanks for making Jay Clayton’s day, whistleblower lawyer Erika Kelton. At last, they’re paying attention.

SEC Whistleblower Tips Decline as Agency Looks to Limit Big Awards [WSJ]

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In recent years, the Securities and Exchange Commission has had its share a fuck-ups come to light. The regulator took a pass on heeding the warning signals by Bernie Madoff himself that he was running a Ponzi scheme, it chose to go after David Einhorn rather than Allied Capital when the hedge fund manager suggested all was not right at the company, and yesterday, it was announced that the Commission is suing Egan-Jones for lying about having rated 150 ABS bonds on an SEC application four years ago (in reality it had rated zero), information that could have been fact-checked at the time but was not because there were new clips on www.ladyboyjuice.com, www.anal-sins.com, and www.fuck-my-wife.com to watch. Today the team scored a new victory when it outed an informant. Federal securities regulators, in a sensitive breach, inadvertently revealed the identity of a whistleblower during a probe of a firm that ran a stock trading platform. The gaffe by the Securities and Exchange Commission occurred during an investigation of Pipeline Trading Systems LLC when an SEC lawyer showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings. The executive says he recognized the handwriting. Pipeline, which didn't admit or deny the allegations, was the subject of a page-one Wall Street Journal article earlier this month. The article didn't name the whistleblower, but he has now agreed to be publicly identified. He is Peter C. Earle, 41, a former employee of a Pipeline trading affiliate. Mr. Earle said he was "disappointed" the SEC took steps in its probe that ended up disclosing his identity to Pipeline. The SEC confirmed showing the notebook to an executive of the business it was investigating. SEC officials said there is always a risk a whistleblower's identity might be disclosed during an investigation, but its practice has been to avoid unnecessarily revealing an informant's identity. The person shown the notebook (in a November 2010 SEC interview), Gordon Henderson, was the head of Pipeline's trading affiliate, Milstream Strategy Group. He said in an interview that he previously suspected Mr. Earle was an SEC informant. Mr. Henderson's desk was near Mr. Earle's in Milstream's New York office, and he said he recognized Mr. Earle's handwriting in the notebook. Related: "Mr. Earle said he made other internal complaints about trading, and was fired on April 3, 2009. Mr. Henderson said the reasons for dismissal included poor performance and a belief Mr. Earle was having an affair with the wife of another Milstream trader at the time. Mr. Earle denied both allegations, calling the notion of poor performance 'ridiculous.'" Source's Cover Blown By SEC [SEC]