2021-03-04 SEC Press pdf 571 KB 49,956 chars

In the Matter of the Claims for Award

Exhibit of SEC Issues Over $5 Million to Joint Whistleblowers Located Abroad

summary

The SEC awarded Claimants 1 and 2 a joint $5+ million whistleblower award for directly triggering a successful enforcement action against a company through original information submitted to the Commission, while denying Claimants 11 and 12 because their media-reported tips about competitors failed to meet any statutory 'led to' criteria under Rule 21F-4(c).

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The SEC granted Claimants 1 and 2 a joint whistleblower award of over $5 million, equal to a percentage of monetary sanctions collected in a covered enforcement action, because their tip directly initiated the investigation and satisfied the 'led to' standard under Rule 21F-4(c)(1). In contrast, Claimants 11 and 12 were denied awards despite reporting information about the company’s competitors to the media, as their submissions did not relate to the company’s conduct, were not provided to the SEC in time, and did not significantly contribute to the action under any of the three statutory pathways. The Commission upheld its Claims Review Staff’s determination, emphasizing that only direct, original information provided to the SEC that causes or materially advances an enforcement action qualifies for an award.

narrative

The SEC awarded Claimants 1 and 2 a joint whistleblower payout of over $5 million for providing original, specific, and timely information that directly triggered and substantially supported a successful enforcement action against a company for securities violations, satisfying Rule 21F-4(c)(1) by causing the investigation to open. Claimants 1 and 2 jointly submitted their tip and Form WB-APP, and the SEC confirmed that the Covered Action was based solely on their information, not on any other source. In contrast, Claimants 11 and 12 submitted tips to the news media regarding the company’s competitors, not the company itself, and their information was unrelated to the charges brought in the Covered Action. Although Claimants 11 and 12 argued that their media reports indirectly prompted the company’s internal review, the SEC rejected this as insufficient under Rule 21F-4(c), noting that their submissions did not meet any of the three exclusive 'led to' criteria—neither initiating the investigation, contributing to its success, nor triggering an internal review that was then reported to the SEC. The Commission further clarified that Rule 21F-4(c)(3) requires claimants to report information to the entity itself, not to the media, and that Claimants 11 and 12 failed to submit their information to the SEC within the required 120-day window. The SEC affirmed that only direct, original information provided to the Commission and directly leading to enforcement qualifies for an award, rejecting speculative or indirect causation claims. Unless Claimants 1 and 2 request a different allocation, each will receive 50% of the joint award.

Enriched metadata

Scheme: unclassified

Classified unclassified. No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →

Extracted insights

Dollar amounts 1

$5.00M $5 million $1M–$10M

Entities 5

person claims review staff
person claims review staff recommendations
person covered action
person enforcement staff
person preliminary determinations

Triples 14

Claims Review Staff issued Preliminary Determinations
Claims Review Staff recommended joint whistleblower award of over $5 million
Claims Review Staff recommended denial of award applications
Claimants 1 and 2 provided written notice of their decision not to contest
Claimants 11 and 12 submitted timely notices contesting the preliminary denial
Commission adopted Claims Review Staff recommendations
Claimants 1 and 2 jointly submitted tip and Forms WB-APP
Office of the Whistleblower directed to pay each of them individually 50% of their joint award
Claimants 11 and 12 did not satisfy led to standard
Enforcement staff confirmed investigation was based on the tip submitted by Claimants 1 and 2
Claims Review Staff determined Claimants 11 and 12 did not satisfy either rule
Claimants 11 and 12 did not provide Commission information about conduct that was already under examination
Allegations made by Claimants 11 and 12 were not used in Covered Action
Submissions had no impact on Covered Action