Covington & Burling Partner Gerald Hodgkins on the SEC Proposal to Limit the Size of Whistleblower Awards

Gerald Hodgkins is featured in an interview with Corporate Crime Reporter regarding the SEC proposal to limit the size of whistleblower awards. Under current SEC rules, whistleblowers are entitled to an award of ten to thirty percent of the recovery. The securities industry is now pushing to limit the size of SEC whistleblower awards. Under a proposed SEC rule, the SEC can reduce the size of an award merely because it is too large.

Mr. Hodgkins explains the current bounty program, saying, “To qualify for a whistleblower award, an action has to be brought by the SEC and have a judgment of over $1 million. There are rules and regulations for properly submitting a claim. And the SEC determines whether the individual properly submitted a claim and provided information that led to an enforcement action. That person’s claim will be reviewed first by the whistleblower office and then the claims review staff and then possibly the SEC itself. And a determination will be made as to whether that person will receive between ten and thirty percent of the money recovered.”