Fortune cites Phillips & Cohen partner Erika Kelton in an article about how SEC rules changes affect whistleblower award payouts.
Many whistleblowers and the lawyers who represent them have complained that getting the money can take years. So now the SEC has established a default award at the top of the range: 30% of the amount collected, in cases where the resulting award would be $5 million or less. If there aren’t any “negative Award Factors”—for example, the whistleblower’s participation in the violation being reported—the Commission won’t spend time deciding the amount and will quickly pay out a 30% award. “The determinations have been mired in delay,” says Erika Kelton, a Washington-D.C.-based lawyer who represents whistleblowers. “This could really expedite things.”
But for the big money—if you don’t consider $5 million for an individual tipster big money—the Commission is tightening the rules. Until now, the amount of an award was based on two criteria: the significance of the information provided and the tipster’s continuing cooperation and assistance. Now the Commissioners will also consider the amount of the award itself, meaning they could reduce the amount if it just seems too big. “They’re changing the rules,” says Kelton. “That’s a big black box and a concern for our clients.”
Read the entire article, “Corporate whistleblowers can now collect more reward money,” on Fortune’s website.