In the Matter of the Claims for an Award
The SEC awarded a whistleblower over $1.25 million for providing original, timely information that led to a successful enforcement action against a company and its individual respondent, resulting in millions of dollars in sanctions returned to harmed investors, with the award exceeding the preliminary recommendation due to the significance of the tip and strong law enforcement interests.
The SEC awarded a whistleblower over $1.25 million, representing a percentage of the monetary sanctions collected in a covered action against a company and an individual respondent, treated as a single enforcement proceeding due to shared factual grounds. The whistleblower’s original information prompted the SEC to open an investigation, leading to millions of dollars in sanctions returned to harmed investors, with no culpability or interference with internal compliance systems found. Although the whistleblower’s ongoing assistance was limited, their prompt reporting and the significance of the information justified an award above the preliminary recommendation under Rule 21F-6 of the Securities Exchange Act of 1934.
The SEC awarded a whistleblower over $1.25 million for providing original, timely information that led to a successful enforcement action against a company and its individual respondent, treated as a single covered action under Rule 21F-4(d) due to their shared factual basis. The whistleblower’s tip directly prompted the SEC to initiate a cause examination and open an investigation, resulting in millions of dollars in monetary sanctions collected to compensate harmed investors. While the whistleblower’s ongoing assistance was limited, their initial information was deemed highly significant, and they acted without delay or interference with internal compliance systems. The Claims Review Staff had initially recommended a lower award, but the Commission increased it, citing strong law enforcement interests and the critical role the whistleblower played in uncovering the misconduct. No other claimant received an award, as their application was denied without contest. The award was granted under Rule 21F-6 of the Securities Exchange Act of 1934, which considers factors such as significance of information, assistance provided, and deterrence value. The Commission emphasized that the whistleblower’s prompt reporting and the scale of investor harm reinforced the appropriateness of the award amount.
Extracted insights
- $1.25M $1,250,000 $1M–$10M
- person claims review staff
- person commission staff
- person enforcement actions
- person original information
- person preliminary determination
- Claims Review Staff issued Preliminary Determination
- Commission awarded Claimant
- Commission awarded $1,250,000
- Claimant provided original information
- Claimant alerted Commission staff
- Claimant's information helped agency
- enforcement actions resulted in return of millions of dollars
- Vanessa A. Countryman served as Secretary
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89712 / August 31, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-27 In the Matter of the Claims for an Award in connection with Redacted Redacted Redacted Redacted 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 over Redacted which is equal to Redacted of the amounts collected in Redacted Redacted and Redacted (“Covered Action”). 1 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 2 After considering the administrative record, we choose to depart from the Preliminary Determination’s recommendation and award Claimant Redacted of the monetary sanctions collected or to be collected in the Covered Action, for a payout of over $1,250,000. 1 For the purposes of making an award in this matter, we are treating the enforcement action against the individual respondent together with the action against the company as a single Covered Action, as the proceedings arise out of the same nucleus of operative facts. See Rule 21F-4(d). 2 Another individual also submitted an award application in connection with the Notice of Covered Action. However, this individual did not contest the preliminary denial of their claim and, as such, the Preliminary Determination with respect to their claim became the Final Order of the Commission through 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: (1) Claimant expeditiously alerted Commission staff to the potential wrongdoing, prompting staff to initiate a cause examination and open an investigation; and (2) there are high law enforcement interests here as Claimant’s information helped the agency bring the successful enforcement actions that resulted in the return of millions of dollars to harmed investors. In determining the appropriate award percentage, we also considered that while Claimant’s initial information was significant, Claimant was only in the position to provide limited ongoing assistance. Accordingly, it is hereby ORDERED that Claimant shall receive an award of over $1,250,000, Redacted of the monetary sanctions collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary operation of Exchange Act Rule 21F-10(f), 17 C.F.R. §240.21F-10 (f). 3 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. § 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. 89712 / August 31, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-27 In the Matter of the Claims for an Award in connection with Redacted Redacted Redacted Redacted 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 over Redacted which is equal to Redacted of the amounts collected in Redacted Redacted and Redacted (“Covered Action”).1 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination.2 After considering the administrative record, we choose to depart from the Preliminary Determination’s recommendation and award Claimant Redacted of the monetary sanctions collected or to be collected in the Covered Action, for a payout of over $1,250,000. 1 For the purposes of making an award in this matter, we are treating the enforcement action against the individual respondent together with the action against the company as a single Covered Action, as the proceedings arise out of the same nucleus of operative facts. See Rule 21F-4(d). 2 Another individual also submitted an award application in connection with the Notice of Covered Action. However, this individual did not contest the preliminary denial of their claim and, as such, the Preliminary Determination with respect to their claim became the Final Order of the Commission through 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: (1) Claimant expeditiously alerted Commission staff to the potential wrongdoing, prompting staff to initiate a cause examination and open an investigation; and (2) there are high law enforcement interests here as Claimant’s information helped the agency bring the successful enforcement actions that resulted in the return of millions of dollars to harmed investors. In determining the appropriate award percentage, we also considered that while Claimant’s initial information was significant, Claimant was only in the position to provide limited ongoing assistance. Accordingly, it is hereby ORDERED that Claimant shall receive an award of over $1,250,000, Redacted of the monetary sanctions collected in the Covered Action. By the Commission. Vanessa A. Countryman Secretary operation of Exchange Act Rule 21F-10(f), 17 C.F.R. §240.21F-10 (f). 3 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. § 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.