In re Claim for Award
summary
An employee who reported securities violations internally to their employer’s compliance program and then to the SEC within 120 days triggered successful enforcement actions by the SEC and another regulatory body, leading to an award of over $500,000—representing a percentage of monetary sanctions collected—for providing original information, in-person cooperation, and critical documents that shut down an ongoing fraud.
paragraph
The whistleblower received an award of over $500,000, equal to a percentage of monetary sanctions collected in both the SEC’s Covered Action and a Related Action, under Rule 21F-4(b)(7). The claimant first reported the securities violations internally to their employer’s compliance program, then submitted the same original information to the SEC within 120 days, qualifying for the safe harbor provision. This information prompted investigations by both agencies, led to swift enforcement actions that shut down an ongoing fraudulent scheme, and was critical due to the whistleblower’s in-person cooperation and provision of key documents.
narrative
An employee who reported securities violations internally to their employer’s compliance program triggered a chain of events that led to successful enforcement actions by the SEC and another regulatory body. Within 120 days of internal reporting, the whistleblower submitted the same original information to the SEC via fax, satisfying Rule 21F-4(b)(7)’s safe harbor and qualifying them for an award as if they had reported directly to the Commission. The information provided was deemed significant and original, prompting the opening of investigations by both agencies and enabling them to swiftly file actions that shut down an ongoing fraudulent scheme. The whistleblower further assisted the SEC through in-person meetings and the provision of critical documents, substantially aiding the enforcement process. The award of over $500,000 represents a percentage of the monetary sanctions collected in both the Covered Action and the Related Action, with no double-counting of shared sanctions. The Commission determined the award was justified under Rule 21F-4(c)(3), as the employer’s internal investigation, initiated in response to the whistleblower’s report, led to the information being provided to the SEC. No specific details of the fraud or defendants were disclosed due to redactions in the record.
Classified unclassified. No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Statutes
15 U.S.C. § 78u-6(b)17 C.F.R. § 240.21F-3(a)17 C.F.R. § 240.21F-Rule 21F-3(a)Rule 21F-4(b)Rule 21F-11(c)Rule 21F-4Rule 21F-9
Parties
claims review stafforiginal information to secpreliminary determinations recommending awardSecurities and Exchange Commissiontip via fax to sec within 120 days
Keywords
commissionactioninformationredactedcovered actionawardrelated actionclaimantwhistleblowerprovidedcoveredrelatedaction relatedcollectedexchange
Extracted insights
Dollar amounts 1
- $500K $500,000 $100K–$1M
Entities 5
- person claims review staff
- agency original information to sec
- person preliminary determinations recommending award
- agency Securities and Exchange Commission
- agency tip via fax to sec within 120 days
Triples 8
- Claimant receive Whistleblower Award Of Over $500,000
- Claimant provided Original Information To SEC
- Claimant reported Securities Violations Internally To Employer
- Claimant submitted Tip Via Fax To SEC Within 120 Days
- SEC issued Whistleblower Award Proceeding Release No. 91426 On March 29, 2021
- Claims Review Staff issued Preliminary Determinations Recommending Award
- Claimant satisfies Rule 21F-4(b)(7) Safe-Harbor Provision
- Information led to Successful Enforcement Of Covered Action And Related Action
PDF
Text layers
Extracted body text (5,047c)
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 91426 / March 29, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-35 In the Matter of the Claims for Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued Preliminary Determinations recommending that Claimant) receive a whistleblower award of over $500,000, which is equal to percent (%) of the amounts collected, or to be collected, in the above-referenced Covered Action (“Covered Action”) and percent (%) of the monetary sanctions collected, or to be collected, in a related action, (“Related Action”). Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determinations. The recommendations of the CRS are adopted. The record demonstrates that Claimant voluntarily provided the same original information to the Commission and to the and that this information led to the successful enforcement of both the Covered Action and the Related Action. 1 In reaching this determination, we have relied upon Exchange Act Rule 21F4(b)(7). That rule provides in relevant part that: If you provide information to ... an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law, and you, within 120 days, submit the same information to the Commission pursuant to §240.21F-9 of this chapter, as you must do in order for you to be eligible to be considered for an award, then, for purposes of evaluating your claim to an award ..., the Commission will consider that you provided [the] information as of the date of your original disclosure, report or submission to one of these other authorities or persons. Thus, if an individual submits his/her tip through an entity’s internal whistleblower, legal, or compliance procedures, the Commission, in considering an award application from that individual, will treat the information as though it had been submitted to the Commission directly from the individual at the same time that it was submitted internally, provided that the individual submitted that same information to the Commission no later than 120 days after the individual first reported internally. In this way, Rule 21F-4(b)(7) operates as a 120-day safe harbor, assuring individuals who voluntarily report misconduct internally (or to another agency) first that they will be treated for award purposes as though they had reported directly to the Commission. Claimant reported the alleged securities violations internally to his/her employer’s which in turn, who reported the information to . The then made a referral to Commission staff, prompting the opening of the Commission’s investigation. Within 120 days of reporting the violations internally, Claimant submitted a tip via fax to the Commission. As such, Claimant satisfies the Rule 21F-4(b)(7) safe-harbor provision and, thus, in making awards to the Claimant for the Covered Action and the Related Action, we have treated the Claimant’s submission to the Commission as though it had been made on the date that the Claimant provided that same information to his/her employer’s . enforcement of the related action.”) (citing Exchange Act Rule 21F-11(c); 17 C.F.R. § 240.21F11(c)). In reaching this determination, we have also relied upon Rule 21F- 4(c)(3), which provides that original information will be deemed to have led to the successful enforcement of a judicial or administrative action if: (1) the whistleblower reported original information through an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law before or at the same time you reported them to the Commission; (2) the entity later provided the information to the Commission or provided results of an audit or investigation initiated in whole or in part in response to information the whistleblower reported to the entity; (3) the information the entity provided to the Commission satisfied either paragraph (c)(1) or (c)(2) of [Rule 21F-4]; and (4) the whistleblower submitted the same information to the In coming to this conclusion, the Commission considered that Claimant provided significant information that prompted the opening of the investigations by the and Commission staff, met with them in-person, and continued to provide helpful documents. Because of Claimant’s information and assistance, the Commission and were able to quickly file actions, shutting down an ongoing fraudulent scheme. Commission in accordance with the procedures set forth in Rule 21F-9 within 120 days of providing it to the entity. Accordingly, it is hereby ORDERED that Claimant shall receive an award of percent ( %) of the monetary sanctions collected or to be collected in the Covered Action and in the Related Action, including any monetary sanctions collected after the date of this Order. 5 By the Commission. Vanessa A. Countryman Secretary 4
OCR text (5,047c · gpumon-ocr-api · 90% conf)
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 91426 / March 29, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-35 In the Matter of the Claims for Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued Preliminary Determinations recommending that Claimant) receive a whistleblower award of over $500,000, which is equal to percent (%) of the amounts collected, or to be collected, in the above-referenced Covered Action (“Covered Action”) and percent (%) of the monetary sanctions collected, or to be collected, in a related action, (“Related Action”). Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determinations. The recommendations of the CRS are adopted. The record demonstrates that Claimant voluntarily provided the same original information to the Commission and to the and that this information led to the successful enforcement of both the Covered Action and the Related Action. 1 In reaching this determination, we have relied upon Exchange Act Rule 21F4(b)(7). That rule provides in relevant part that: If you provide information to ... an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law, and you, within 120 days, submit the same information to the Commission pursuant to §240.21F-9 of this chapter, as you must do in order for you to be eligible to be considered for an award, then, for purposes of evaluating your claim to an award ..., the Commission will consider that you provided [the] information as of the date of your original disclosure, report or submission to one of these other authorities or persons. Thus, if an individual submits his/her tip through an entity’s internal whistleblower, legal, or compliance procedures, the Commission, in considering an award application from that individual, will treat the information as though it had been submitted to the Commission directly from the individual at the same time that it was submitted internally, provided that the individual submitted that same information to the Commission no later than 120 days after the individual first reported internally. In this way, Rule 21F-4(b)(7) operates as a 120-day safe harbor, assuring individuals who voluntarily report misconduct internally (or to another agency) first that they will be treated for award purposes as though they had reported directly to the Commission. Claimant reported the alleged securities violations internally to his/her employer’s which in turn, who reported the information to . The then made a referral to Commission staff, prompting the opening of the Commission’s investigation. Within 120 days of reporting the violations internally, Claimant submitted a tip via fax to the Commission. As such, Claimant satisfies the Rule 21F-4(b)(7) safe-harbor provision and, thus, in making awards to the Claimant for the Covered Action and the Related Action, we have treated the Claimant’s submission to the Commission as though it had been made on the date that the Claimant provided that same information to his/her employer’s . enforcement of the related action.”) (citing Exchange Act Rule 21F-11(c); 17 C.F.R. § 240.21F11(c)). In reaching this determination, we have also relied upon Rule 21F- 4(c)(3), which provides that original information will be deemed to have led to the successful enforcement of a judicial or administrative action if: (1) the whistleblower reported original information through an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law before or at the same time you reported them to the Commission; (2) the entity later provided the information to the Commission or provided results of an audit or investigation initiated in whole or in part in response to information the whistleblower reported to the entity; (3) the information the entity provided to the Commission satisfied either paragraph (c)(1) or (c)(2) of [Rule 21F-4]; and (4) the whistleblower submitted the same information to the In coming to this conclusion, the Commission considered that Claimant provided significant information that prompted the opening of the investigations by the and Commission staff, met with them in-person, and continued to provide helpful documents. Because of Claimant’s information and assistance, the Commission and were able to quickly file actions, shutting down an ongoing fraudulent scheme. Commission in accordance with the procedures set forth in Rule 21F-9 within 120 days of providing it to the entity. Accordingly, it is hereby ORDERED that Claimant shall receive an award of percent ( %) of the monetary sanctions collected or to be collected in the Covered Action and in the Related Action, including any monetary sanctions collected after the date of this Order. 5 By the Commission. Vanessa A. Countryman Secretary 4