Record Number of Public Comments are Submitted in Opposition to Proposed SEC Rule

Published on October 22, 2019

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Record Number of Public Comments are Submitted in Opposition to Proposed SEC Rule

Washington, DC | October 22, 2019 – The National Whistleblower Center (NWC) today filed a historic petition with 102,595 signatures opposing a proposed Securities & Exchange Commission (SEC) rule that would reduce whistleblower protections and rewards. When combined with the more than 15,000 comments directly filed with the SEC by many of these individuals, this is the largest-ever set of comments on an SEC whistleblower program change. It is also one of the top seven sets of comments on any SEC action.

John Kostyack, NWC Executive Director, stated,

“We are excited about this historic outpouring of opposition to the SEC’s proposed whistleblower rule. Large-scale securities fraud has resulted in serious economic damage, including painful losses of jobs and family savings. We hope that this record-breaking showing of public opposition will persuade the SEC to reverse course and continues fulfilling its responsibility to protect and reward whistleblowers.”

Stephen M. Kohn, NWC Board Chairman and partner at the whistleblower rights law firm of Kohn, Kohn, and Colapinto, issued the following statement in regards to the filing of the petition:

“The 102,595 petition signatures delivered today by the NWC to the SEC demonstrate the overwhelming public support for the SEC’s highly successful whistleblower program. We sincerely hope that the SEC uses the current rulemaking procedures to enhance the protections and incentives for whistleblowers and rejects the pending proposals that would undermine the program.”

The SEC’s proposed rule would undercut whistleblower protections in two ways. First, it would place a cap on the amount of whistleblower rewards, thus substantially reducing a key incentive for whistleblowers to bring evidence of securities fraud to SEC enforcement officials. Second, it would reduce or eliminate protections and rewards for anyone who fails to complete the Tip, Complaint and Referral (TCR) form in their first attempt to contact the SEC. Disqualifying a potentially vast number of whistleblowers based on such a technicality – regardless of whether those whistleblowers later attempt to rectify their failure to complete the form – would be devastating to the program.

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