Oct. 29, 2018
To the SEC: I am writing in regard to the SEC's Proposed Amendments to the Whistleblower Program Rules, Release Number 34-83557, File Number S7-16-18. In the newly proposed rules, the SEC disparages tips that rely on multiple sources of publicly available information (see page 107 of the SEC's analysis of the new whistleblower rules). Obviously, there will be cases where the SEC will not investigate frauds if such tips are not submitted to the SEC. Does the SEC prefer to not, or at least later in time, investigate frauds (some of them serious), because they wish to discourage tips with publicly available information? The SEC already has a method to deal with tips of this kind. I was refused a whistleblower award. In the refusal, the SEC stated my tip failed to produce information that was "not already known" to the SEC. That's fair. The SEC should continue with that method. But by discouraging tips that draw on multiple sources of publicly available information, the SEC undoubtedly will not, and perhaps never, investigate some serious frauds effecting the public, because some of those tips will be the only impetus for an SEC investigation. All tips utilizing publicly available information should be encouraged, as long as the tips point to a conclusion that is "not generally known". That is the current standard. Then, if the SEC already knows the information in the tip, they can disallow an award because the SEC already knew the information. Also, for the whistleblower, there is a somewhat darker aspect of the newly proposed rules regarding publicly available information. This is a quote from an October 17th whistleblower comment: "Information submitted by a whistleblower that is "not already known" to the SEC, can later be used by the SEC in an investigation. Then, during the SEC award process, the SEC can declare the whistleblower information to be "readily apparent", even if THE SEC DID NOT ALREADY KNOW IT. In this way, the SEC created a way to steal a whistleblower's information, that the SEC did not already know, use that information in an SEC investigation, and later dodge the payment of an SEC whistleblower award." If the SEC is concerned with paying whistleblower awards on information that LATER becomes publicly known, the SEC should move earlier on suspected frauds, as they have recently done with the Elon Musk tweets in the matter of Tesla. That situation was addressed by the SEC in a few hours or days. But discouraging whistleblower tips on frauds that may NEVER BE INVESTIGATED OTHERWISE, when the remedy is already at hand (i.e. denying an award because the information was already known to the SEC), is a punitive and unnecessary strike against the public. The SEC should not penalize the public for using information the SEC does not already know, or worse yet, in the scenario outlined by the October 17th commentator, utilize the public's TCR knowledge, and then seek to "dodge" a legitimate whistleblower award. Thank you, Anonymous