SEC's Interpretation Of Tipster Protection Rule Stirs Debate

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By Al Barbarino (April 13, 2022, 7:28 PM EDT) — The U.S. Securities and Exchange Commission fined a former tech company executive nearly $100,000 for allegedly impeding a tipster’s ability to communicate with the agency, but Commissioner Hester Peirce says the order used an “undisciplined interpretation” of the relevant whistleblower protection rule.

On Tuesday, the SEC ordered David Hansen, the ex-chief information officer of a Las Vegas-based fraud detection and prevention software firm formerly known as NS8 Inc., to pay $97,523 to the agency for the alleged violation of Rule 21F-17.

Section “a” of the rule states that “no person may take any action to impede an individual from communicating directly…

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