The Securities and Exchange Commission’s Trump administration-long antipathy for the very idea of whistleblowing has softened quite a bit under quarantine, but it has not completely evaporated. Take one of Jay Clayton’s many last-minute efforts, a muddled rewriting of the award rules to, well, muddle them. Under those guidelines, the really big awards—those in excess of $5 million that the SEC so proudly proclaims in breathless press releases—don’t get the presumption of a 30% cut that smaller payouts get. Instead, they get some extra analysis of the “more deeply positive and negative factors.” And even if there aren’t any of the latter, there’s no guarantee that the turncoat, er, whistleblower will get all that once would have been coming to him.
Now, we don’t know if the new procedure was used to determine the latest award announced, a whopping $114 million—more than twice as high as the previous record. We do know that there don’t sound like there were any “negative factors.” Beyond that, things are, well, muddled: Is the $114 million 30% of a $380 million fine? 10% of a $1.14 billion sanction? Who knows? The new rules require no such clarity.
The $114 million award consists of an approximately $52 million award in connection with the SEC case and an approximately $62 million award arising out of the related actions by another agency….
“The actions of the whistleblower awarded today were extraordinary,” added Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “After repeatedly reporting concerns internally, and despite personal and professional hardships, the whistleblower alerted the SEC and the other agency of the wrongdoing and provided substantial, ongoing assistance that proved critical to the success of the actions…."
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.”
Or indicate what exactly Jay Clayton is doing.
SEC Issues Record $114 Million Whistleblower Award [press release]