Red Notice Newsletter - June 2018

ANTICORRUPTION DEVELOPMENTS -

SEC Proposes Amendments to Whistleblower Award Program -

On June 28, 2018, the Securities and Exchange Commission (SEC) proposed amendments to its whistleblower award process for the first time since the program was announced in 2010. One of the most notable proposals includes authorizing the SEC to exercise its discretion to award whistleblowers larger amounts—up to $2 million—in cases where the recovery would typically warrant a whistleblower payout of less than $2 million, and to award whistleblowers smaller amounts—no less than $30 million—where the monetary sanctions imposed exceed $100 million. Any discretionary adjustment to award payouts would remain consistent with the statutory mandate that awards range from 10 percent to 30 percent of the monetary sanctions collected, and where the total monetary sanctions are at least $1 million.

In addition, the proposed amendments would (1) clarify that whistleblower awards are available in cases where there is a deferred prosecution agreement or a non¬-prosecution agreement; (2) revise the definition of whistleblower to align with a February 2018 Supreme Court decision requiring whistleblowers to report information directly to the SEC in order to qualify for anti-¬retaliation protection, instead of merely reporting internally to their supervisors or office compliance personnel; and (3) streamline the review process for clearly time-¬barred, repetitive or otherwise ineligible award applications. The proposed amendments will be subject to a public comment period that will remain open for 60 days following publication of the proposed amendments in the Federal Register.

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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