The Securities and Exchange Commission (SEC) amended its rules to provide further incentives to whistleblowers, particularly in cases involving large payouts or multiple federal agencies.

The final rule, which will become effective 30 days after publication in the Federal Register, allows the commission to increase the dollar amount of an award but removes its authority to decrease it, according to an SEC fact sheet. The current rule provides whistleblowers with 10-30 percent of monetary sanctions collected in any enforcement action over $1 million for which the whistleblower provided relevant and timely information to help investigators make a case.

In 2020, the Republican-led SEC under former Chair Jay Clayton amended its whistleblower rules to potentially limit large payouts. In February, current SEC Chair Gary Gensler indicated the agency under Democratic control would seek to unwind those changes.

Another amendment adopted allows the SEC to consider payouts to whistleblowers who provide relevant and timely information that leads to a successful enforcement action by another federal agency (a “related action”). In some cases, the SEC’s awards for tipsters are more generous than those offered by other agencies. Some federal agencies lack any whistleblower program at all.

“The commission will make an award on a potential related action without regard to which program had the more direct or relevant connection to the action if the maximum award that the commission could pay on the action would not exceed $5 million,” according to the fact sheet.

“I think that these rules will strengthen our whistleblower program. That helps protect investors,” Gensler said Friday in a press release.

Advocates for whistleblowers cheered the changes.

“The commission ensured that whistleblowers who turn in the biggest frauds will not be penalized by having their rewards reduced. As the commission understood, paying large awards in the biggest fraud cases will have a deterrent effect on Wall Street,” said Stephen Kohn, a whistleblower attorney with the firm Kohn, Kohn & Colapinto and chairman of the board of the National Whistleblower Center.

Stephen Hall, legal director and securities specialist at Better Markets, said the changes “will encourage more insiders to blow the whistle on corporate crime, and they will help protect the investments and retirement savings of Main Street consumers, investors, and families against crooks, fraudsters, and rip-off artists.”

SEC Commissioner Hester Peirce called the amendments “solutions in search of a problem” that “further complicate the already byzantine rules governing our whistleblower program” in a dissenting statement. She included the change as part of what she called a troubling trend of the Gensler-led SEC rewriting rules that were just recently passed.

“The whistleblower rules join the proxy adviser rules, shareholder proposal rules, and perhaps the resource extraction rules in being reopened even though the ink was barely dry on the last set of amendments,” she said.