In the Matter of the Claim for an Award
The SEC awarded nearly $700,000 to a whistleblower who provided original, voluntary information that triggered and substantially aided an enforcement action against undisclosed respondents for securities violations, leading to collected monetary sanctions and the return of funds to harmed investors.
The SEC granted a whistleblower nearly $700,000 for providing original information that initiated and significantly assisted an enforcement action under the Securities Exchange Act of 1934. The award, based on collected monetary sanctions—including disgorgement and prejudgment interest, some of which were offset but still counted as collected—was determined appropriate under Rule 21F-6 due to the whistleblower’s pivotal role, ongoing cooperation, internal reporting, and personal hardship. No specific violations or respondents are disclosed due to redactions, but the SEC emphasized strong law enforcement interests in deterring fraud and compensating harmed investors.
The SEC awarded nearly $700,000 to a whistleblower who voluntarily provided original information that led to the successful enforcement of a covered action involving undisclosed securities violations. Claimant’s actions prompted the SEC to open its investigation, and they provided significant ongoing assistance that saved agency time and resources. The whistleblower had also internally reported their concerns in an effort to remedy the misconduct before contacting the SEC, and suffered undue hardship as a result of their whistleblowing. The SEC determined the award was appropriate under Rule 21F-6, considering the significance of the information, the claimant’s cooperation, and the strong law enforcement interest in deterring fraud and returning funds to harmed investors. Monetary sanctions collected from respondents—including disgorgement and prejudgment interest—were used to calculate the award, with certain offset amounts still treated as 'collected' under the law. The claimant did not contest the Preliminary Determination, and the SEC formally adopted the award recommendation. The specific nature of the fraud and identities of the respondents remain redacted, but the case underscores the SEC’s commitment to incentivizing internal and external reporting of securities misconduct.
Extracted insights
- $700K $700,000 $100K–$1M
- person covered action
- person harmed investors
- agency original information to sec
- agency sec enforcement staff to potential wrongdoing
- agency Securities and Exchange Commission
- agency significant ongoing assistance to sec enforcement staff
- Claimant receive Whistleblower Award Of Almost $700,000
- Claimant provided Original Information To SEC
- Claimant alerted SEC Enforcement Staff To Potential Wrongdoing
- Claimant provided Significant Ongoing Assistance To SEC Enforcement Staff
- Claimant internally reported Concerns In Effort To Remedy Conduct
- Claimant suffered Undue Hardship As Result Of Whistleblowing Activities
- SEC issued Preliminary Determination Recommending Whistleblower Award
- SEC adopted Recommendation Of Claims Review Staff
- Covered Action collected Monetary Sanctions From Respondents
- Money returned to Harmed Investors
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89102 / June 19, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-21 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 almost $700,000, based on amounts currently collected in the above referenced Covered Action (“Covered Action”), which is equal to a Redacted award. Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 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. 1 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. 2 In 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. § 240.21F-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 reaching that determination, we positively assessed the following facts: (1) Claimant alerted Enforcement staff to the potential wrongdoing, prompting Enforcement staff to open the investigation; (2) Claimant provided significant ongoing assistance to Enforcement staff during the investigation that saved Commission time and resources; (3) Claimant internally reported Claimant’s concerns in an effort to remedy the conduct; (4) Claimant suffered undue hardship as a result of Claimant’s whistleblowing activities; and (5) there are high law enforcement interests here as money was returned to harmed investors. Accordingly, it is hereby ORDERED that Claimant shall receive an award of of the monetary sanctions collected or to be collected in the Covered Action. 3 By the Commission. Vanessa Countryman Secretary Redacted 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. 3 A portion of disgorgement and prejudgment interest ordered against one of the respondents in the Covered Action was offset by the respondent’s Redacted We treat the amounts subject to such offset Redacted along with other monetary sanctions paid by the respondents, as “collected” for purposes of payment on the Claimant’s award. See Exchange Act § 21F(b)(1)(A)-(B), 15 U.S.C. § 78u-6(b)(1)(A)-(B).
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 89102 / June 19, 2020 WHISTLEBLOWER AWARD PROCEEDING File No. 2020-21 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 almost $700,000, based on amounts currently collected in the above referenced Covered Action (“Covered Action”), which is equal to a Redacted award. Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 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.1 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.2 In 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. § 240.21F-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 reaching that determination, we positively assessed the following facts: (1) Claimant alerted Enforcement staff to the potential wrongdoing, prompting Enforcement staff to open the investigation; (2) Claimant provided significant ongoing assistance to Enforcement staff during the investigation that saved Commission time and resources; (3) Claimant internally reported Claimant’s concerns in an effort to remedy the conduct; (4) Claimant suffered undue hardship as a result of Claimant’s whistleblowing activities; and (5) there are high law enforcement interests here as money was returned to harmed investors. Accordingly, it is hereby ORDERED that Claimant shall receive an award of of the monetary sanctions collected or to be collected in the Covered Action.3 By the Commission. Vanessa Countryman Secretary Redacted 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. 3 A portion of disgorgement and prejudgment interest ordered against one of the respondents in the Covered Action was offset by the respondent’s Redacted We treat the amounts subject to such offset Redacted along with other monetary sanctions paid by the respondents, as “collected” for purposes of payment on the Claimant’s award. See Exchange Act § 21F(b)(1)(A)-(B), 15 U.S.C. § 78u-6(b)(1)(A)-(B).