September 23,2020

Grassley Statement on New SEC Whistleblower Rules

Washington – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) today issued the following comment after the Securities Exchange Commission (SEC) today approved new rules regarding awards for whistleblowers who bring forward information about fraud.

“I’m glad Chairman Clayton and the commission heeded many of my concerns and many concerns of the broader whistleblower community. It’s critical that we continue to incentivize and reward Americans who expose waste, fraud and abuse, anywhere they are. I’d encourage the SEC to continue hearing out whistleblower advocates, and to do all it can to promote these critical programs. In particular, I commend the withdrawal of the proposed rule that would’ve allowed the commission to adjust an award if it was determined to have been too large. Whistleblowers take great risk in coming forward with valuable information and large awards are critical to encouraging whistleblower activity. I was also pleased to learn that the commission passed a rule today that will establish a presumption granting the statutory maximum award possible in cases under $5 million.
 
“There is still more work to be done legislatively to improve this program, chief among them, is overturning  Digital Realty Trust, Inc. V. Somers  to ensure that whistleblowers who report wronging internally are protected. Now more than ever, passing critical legislation to overturn this bad Supreme Court precedent is critical. I hope Chairman Clayton and the Commission will continue to work with myself and the whistleblower community to improve this program.”

 
Background

In September 2018, Grassley wrote to SEC Chairman Clayton expressing his opposition to newly proposed whistleblower regulations. The letter was filed as a public comment. In his letter, Grassley raised several concerns with the proposed regulations, chief among them was the “award cap” which has been removed in the rules approved today.

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