If Jay Clayton & co. hoped that their recent lack of outright hostility towards snitches, er, whistleblowers would convince people that the Securities and Exchange Commission under their watch hasn’t been outright hostile towards whistleblowers, if they thought that the big headline numbers and other occasional pats on the head would obscure the fact that even amidst the apparent thaw gutting those provisions remained very much on Clayton’s regulatory bucket list, they clearly forgot that they, like every other part of this awful and mercifully ending administration, are not as good at concealing their motives as they like to think.
The clarification, which goes into effect Monday, states that a whistleblower’s tip has to offer insight “beyond what would be reasonably apparent” to the agency from publicly available information…. In its new guidance, the agency said it would consider whether a whistleblower’s conclusion derives from multiple sources, “including sources that are not readily identified and accessed by a member of the public without specialized knowledge, unusual effort, or substantial cost.” The sources must also collectively “raise a strong inference of a potential securities law violation that is not reasonably inferable” from any single source.
Whistleblowers and their attorneys are concerned that the interpretation could give the commission greater scope to reject payouts and raise the bar for potential awards so high that some tipsters might be discouraged from coming forward.
We’re pretty sure that’s precisely the point.