The importance of rewarding whistleblowers who consult the media

The Chairman of the United States Securities and Exchange Commission (SEC), Chairman Gary Gensler, appeared on Yahoo! Finance on Sunday, March 13 to recognize the important role the SEC plays in shaping public policy. Just before Gensler appeared, there was coverage of a slain journalist covering the war in Ukraine. There is a link between the two.

For some whistleblowers, such as Russian citizens, or others who distrust the government or fear for their lives if their identity is revealed, they may find a safe space to present their disclosure to a trusted reporter , possibly based on earlier reporting by the reporter. Why should a whistleblower submitted to the SEC in the form of a news story be treated any differently than a report that used an attorney as an intermediary? More importantly, what public policy is furthered by penalizing whistleblowers who can trust a journalist’s integrity and the public pressure resulting from public disclosure about the operations of a secret government agency?

If the whistleblower clears the hurdle of being the true original source of information used by the SEC to sanction an entity or individual, and did so voluntarily, then the SEC should treat that whistleblower like other voluntary whistleblowers who seek reward. Everything else represents a policy that discourages rather than induces individuals to take the actions that lead to the disclosure of original information to the SEC.