Sen. Charles Grassley has expressed “serious concerns” about the Securities and Exchange Commission’s proposed regulations for implementing its new whistleblower program, saying the proposed rules “threaten to limit the effectiveness of the program.”
In a May 10 letter to the SEC, Grassley said one of his concerns was an “over-emphasis” on internal compliance programs at the expense of whistleblowers. Corporate interests have been demanding the SEC require whistleblowers to report concerns about securities law violations to internal compliance programs before informing the SEC. The SEC didn’t go that far in its proposed regulations. But it did propose that whistleblowers would receive a larger reward if they report fraud to internal compliance programs before going to the SEC.
Grassley said such a requirement “would effectively render the whistleblower program null and void.” he said that would effectively chill good faith whistleblowers from coming forward for fear they would be terminated.
See Grassley’s website to read his entire letter to the SEC about the proposed whistleblower rules.