Whistleblower Attorney Says Proposed Rules Could Devastate SEC Whistleblower Program
Leading whistleblower attorney Stephen M. Kohn, a partner at the qui tam law firm Kohn, Kohn & Colapinto, recently spoke to Corporate Crime Reporter about proposed rules that could devastate the Securities and Exchange Commission (SEC) whistleblower program.
In July 2018, the SEC proposed rules that could limit the size of monetary rewards, the primary incentive for whistleblowers who are considering reporting wrongdoing. Removing the incentive for high-level executives to come forward to report large frauds could significantly weaken the SEC whistleblower program.
“They were creating a regulatory scheme so that the bigger rewards would get the lowest percentage recovery to the whistleblower,” Kohn said to Corporate Crime Reporter. “They have to give at least ten percent. But if you were going to get an award of $30 million or more, they were going to keep you at the ten percent level. As we pointed out, that would discourage the big fish – the employees higher up in the corporation who make a lot of money. They are some of the best sources. It would have a devastating impact.”
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