In the Matter of the Claim for an Award
The SEC awarded $750,000 to a whistleblower who provided original information prompting an investigation into U.S. securities law violations in foreign jurisdictions, despite the final charges targeting a different subsidiary, with the award deemed appropriate under Rule 21F-6 due to the whistleblower’s cooperation, internal reporting, and the difficulty of detecting cross-border fraud.
The SEC awarded a whistleblower $750,000, representing a percentage of monetary sanctions collected in a covered enforcement action involving alleged U.S. securities law violations in foreign jurisdictions. Although the whistleblower’s initial tip identified one subsidiary, the final charges focused on a different entity, with most evidence derived from other sources; however, the whistleblower’s voluntary cooperation—including in-person meetings with Enforcement staff and internal reporting—was deemed significant. The SEC applied Rule 21F-6 factors, recognizing the law enforcement value of uncovering hard-to-detect cross-border misconduct and the whistleblower’s lack of culpability, and granted the award without contest after adopting the Preliminary Determination.
The SEC awarded $750,000 to a whistleblower for providing original information that prompted an investigation into alleged violations of U.S. securities laws occurring in foreign jurisdictions, where detection is inherently difficult. Although the whistleblower’s initial tip pointed to one subsidiary, the eventual enforcement action centered on a different entity, with the majority of evidence gathered from other sources. Nevertheless, the whistleblower played a critical initiating role by voluntarily reporting the misconduct internally and then cooperating fully with the SEC, including meeting with Enforcement staff to provide additional details. The Commission evaluated the award under Rule 21F-6, positively considering the significance of the information, the whistleblower’s assistance, the deterrence value of rewarding cross-border reporting, and the fact that the whistleblower had not delayed reporting or interfered with internal compliance. The SEC also noted the absence of any culpability on the whistleblower’s part and the importance of encouraging insiders to come forward despite complex international operations. The whistleblower did not contest the Preliminary Determination recommending the $750,000 award, which represented a percentage of the monetary sanctions collected. Ultimately, the SEC concluded that this amount appropriately recognized the whistleblower’s meaningful, though not exclusive, contribution to the successful enforcement action.
Extracted insights
- $750K $750,000 $100K–$1M
- $750K $750,000 $100K–$1M
- CrS Issued A Preliminary Determination
- Claimant Received A whistleblower award of $750,000
- Claimant Provided Written notice of Claimant’s decision not to contest the Preliminary Determination
- Claimant Voluntarily provided Original information to the Commission
- Claimant’s information Prompted Staff in the Commission’s Division of Enforcement to open an investigation
- Claimant Met with Enforcement staff to provide additional information
- Claimant Identified Alleged violations of the U.S. securities laws
- Claimant Internally reported Claimant’s concerns
- The Commission Focused on Violations occurring at a different subsidiary
- The case Was largely built through Information obtained from other sources
- The Commission Ordered Claimant shall receive an award of Redacted of the monetary sanctions collected or to be collected in the Covered Action
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89995 / September 25, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-33 In the Matter of the Claim for an Award in connection with Redacted Notice of Covered Action Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that Redacted (“Claimant”) receive a whistleblower award of $750,000, equal to Redacted of the monetary sanctions collected in Covered Action Redacted (the “Covered Action”). Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 1 The recommendation of the CRS is adopted. The record demonstrates that Claimant voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action. Applying the award criteria in Rule 21F-6 of the Securities Exchange Act of 1934 to the specific facts and circumstances here, we find the proposed amount is appropriate. 2 In reaching 1 See Securities Exchange Act of 1934 (“Exchange Act”) Section 21F(b)(1), 15 U.S.C. §78u-6(b)(1); Exchange Act Rule 21F-3(a), 17 C.F.R. §24021F-3(a). 2 In assessing the appropriate award amount, Exchange Act Rule 21F-6 provides that the Commission consider: (1) the significance of information provided to the Commission; (2) the assistance provided in the Commission action; (3) law enforcement interest in deterring violations in granting awards; (4) participation in internal compliance that determination, we positively assessed the following facts: (i) Claimant’s information prompted staff in the Commission’s Division of Enforcement to open an investigation into the alleged violations; (ii) Claimant met with Enforcement staff to provide additional information; (iii) there are important law enforcement interests here in that Claimant identified alleged violations of the U.S. securities laws that were occurring in foreign jurisdictions, which are hard to detect; and (iv) Claimant internally reported Claimant’s concerns. We also considered, however, that the Commission’s charges focused on violations occurring at a different subsidiary than the one identified by Claimant in Claimant’s initial tip to the Commission, and that the case was largely built through information obtained from other sources. On balance, we believe that a $750,000 award Redacted appropriately recognizes Claimant’s level of contribution to the Covered Action. Accordingly, it is hereby ORDERED that Claimant shall receive an award of Redacted of the monetary sanctions collected or to be collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. §240.21F-6.
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89995 / September 25, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-33 In the Matter of the Claim for an Award in connection with Redacted Notice of Covered Action Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that Redacted (“Claimant”) receive a whistleblower award of $750,000, equal to Redacted of the monetary sanctions collected in Covered Action Redacted (the “Covered Action”). Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 1 The recommendation of the CRS is adopted. The record demonstrates that Claimant voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action. Applying the award criteria in Rule 21F-6 of the Securities Exchange Act of 1934 to the specific facts and circumstances here, we find the proposed amount is appropriate.2 In reaching 1 See Securities Exchange Act of 1934 (“Exchange Act”) Section 21F(b)(1), 15 U.S.C. §78u-6(b)(1); Exchange Act Rule 21F-3(a), 17 C.F.R. §24021F-3(a). 2 In assessing the appropriate award amount, Exchange Act Rule 21F-6 provides that the Commission consider: (1) the significance of information provided to the Commission; (2) the assistance provided in the Commission action; (3) law enforcement interest in deterring violations in granting awards; (4) participation in internal compliance that determination, we positively assessed the following facts: (i) Claimant’s information prompted staff in the Commission’s Division of Enforcement to open an investigation into the alleged violations; (ii) Claimant met with Enforcement staff to provide additional information; (iii) there are important law enforcement interests here in that Claimant identified alleged violations of the U.S. securities laws that were occurring in foreign jurisdictions, which are hard to detect; and (iv) Claimant internally reported Claimant’s concerns. We also considered, however, that the Commission’s charges focused on violations occurring at a different subsidiary than the one identified by Claimant in Claimant’s initial tip to the Commission, and that the case was largely built through information obtained from other sources. On balance, we believe that a $750,000 award Redacted appropriately recognizes Claimant’s level of contribution to the Covered Action. Accordingly, it is hereby ORDERED that Claimant shall receive an award of Redacted of the monetary sanctions collected or to be collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. §240.21F-6.