In the Matter of the Claim for an Award
The SEC awarded a whistleblower $2.4 million for providing original, timely information that led to a successful enforcement action involving undisclosed misconduct, enabling detection of fraud, identification of key witnesses, targeted subpoenas, and contribution to all charges, with two other claimants denied awards.
The SEC awarded $2.4 million to a whistleblower who provided original information that triggered an investigation into undisclosed misconduct by a company, resulting in a covered enforcement action. The whistleblower’s assistance was critical in detecting the fraud, identifying key witnesses and parties, drafting targeted subpoenas, and supporting all charges, thereby saving significant investigative resources. The award, representing a percentage of monetary sanctions collected, was deemed appropriate under SEC Rule 21F-6, and two other claimants were denied awards for failing to seek reconsideration.
The SEC awarded $2.4 million to a whistleblower (Claimant) for voluntarily providing original, timely information that led to a successful enforcement action involving undisclosed misconduct by a company, which the Commission treated as a single 'Covered Action' under Rule 21F-4(d) due to its connection with a related proceeding. The whistleblower’s information was instrumental in initiating the investigation, detecting the fraud, identifying key witnesses and parties, and enabling the drafting of targeted subpoenas, which substantially reduced the Commission’s investigative time and resources. Their cooperation directly contributed to all charges brought in the action, and the SEC found the award amount appropriate under Rule 21F-6 based on the significance of the information and the extent of assistance provided. The whistleblower did not contest the Preliminary Determination, allowing it to become the Final Order. Two other claimants were denied awards because they did not request reconsideration, and no public details were disclosed regarding the identity of the company, the nature of the misconduct, or the total monetary sanctions collected. The Commission emphasized the importance of incentivizing whistleblowers to report violations internally and externally, reinforcing its commitment to deterring securities fraud through robust award programs.
Extracted insights
- $2.40M $2,400,000 $1M–$10M
- person commission detect violations
- agency original information to sec
- agency secretary of sec
- agency Securities and Exchange Commission
- person whistleblower award
- Claimant receive Whistleblower Award Of $2,400,000
- Claimant provided Original Information To SEC
- Claimant's Information led to Successful Enforcement Of Covered Action
- Claimant submitted Timely Information That Prompted Investigation
- Claimant's Information helped Commission Detect Violations
- Claimant's Information helped identify Key Witnesses And Parties
- Claimant's Assistance contributed to All Charges Of Covered Action
- SEC issued Preliminary Determination On September 21, 2020
- Whistleblower Award equals Percentage Of Monetary Sanctions Collected
- Vanessa A. Countryman signed as Secretary Of SEC
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89929 / September 21, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-32 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 in the amount of $2,400,000, which is equal to *** percent ( *** %) of the monetary sanctions collected in Covered Action Redacted (the “Covered Action”). 1 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 2 1 The Preliminary Determination of the CRS also recommended that the Covered Action include a second proceeding, Redacted Redacted which arose out of the same nucleus of operative facts as the proceeding in Redacted Redacted See 17 C.F.R. § 240.21F-4(d). For purposes of making an award in this matter, the Commission will treat both actions as part of the Covered Action. 2 The Preliminary Determination of the CRS also recommended denying awards to Claimants 2 and 3, who did not submit requests for reconsideration. As such, the Preliminary Determination has become the Final Order of the Commission with respect to Claimants 2 and 3 pursuant to Exchange Act Rule 21F-10(f), 17 C.F.R. § 240.21F-10(f). 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. 3 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 award amount is appropriate. 4 In reaching that determination, we positively assessed the following facts: (i) Claimant timely submitted information that prompted Enforcement staff to open an investigation into a Redacted Redacted (ii) Claimant’s information helped the Commission detect Redacted Redacted (iii) Claimant’s information helped staff identify key witnesses and parties and draft targeted subpoenas, which saved the staff time and resources in conducting the investigation; and (iv) Claimant’s assistance throughout the investigation contributed to all of the charges of the Covered Action. Accordingly, it is hereby ORDERED that Claimant shall receive an award of percent ( *** %) of the monetary sanctions collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary Redacted 3 See Exchange Act Section 21F(b)(1), 15 U.S.C. § 78u-6(b)(1); Exchange Act Rule 21F- 3(a), 17 C.F.R. § 240.21F-3(a). 4 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 by granting awards; (4) participation in internal compliance 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. 89929 / September 21, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-32 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 in the amount of $2,400,000, which is equal to *** percent ( *** %) of the monetary sanctions collected in Covered Action Redacted (the “Covered Action”).1 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination.2 1 The Preliminary Determination of the CRS also recommended that the Covered Action include a second proceeding, Redacted Redacted which arose out of the same nucleus of operative facts as the proceeding in Redacted Redacted See 17 C.F.R. § 240.21F-4(d). For purposes of making an award in this matter, the Commission will treat both actions as part of the Covered Action. 2 The Preliminary Determination of the CRS also recommended denying awards to Claimants 2 and 3, who did not submit requests for reconsideration. As such, the Preliminary Determination has become the Final Order of the Commission with respect to Claimants 2 and 3 pursuant to Exchange Act Rule 21F-10(f), 17 C.F.R. § 240.21F-10(f). 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.3 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 award amount is appropriate.4 In reaching that determination, we positively assessed the following facts: (i) Claimant timely submitted information that prompted Enforcement staff to open an investigation into a Redacted Redacted (ii) Claimant’s information helped the Commission detect Redacted Redacted (iii) Claimant’s information helped staff identify key witnesses and parties and draft targeted subpoenas, which saved the staff time and resources in conducting the investigation; and (iv) Claimant’s assistance throughout the investigation contributed to all of the charges of the Covered Action. Accordingly, it is hereby ORDERED that Claimant shall receive an award of percent ( *** %) of the monetary sanctions collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary Redacted 3 See Exchange Act Section 21F(b)(1), 15 U.S.C. § 78u-6(b)(1); Exchange Act Rule 21F- 3(a), 17 C.F.R. § 240.21F-3(a). 4 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 by granting awards; (4) participation in internal compliance systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. § 240.21F-6.