In the Matter of the Claim for Award
A whistleblower received over $1.8 million from the SEC for providing the first and pivotal original information that enabled the detection and prosecution of undisclosed foreign-based securities violations, with extensive cooperation including document review, sworn testimony, and witness assistance.
The SEC awarded a whistleblower more than $1.8 million for providing original information that initiated and substantially advanced an enforcement action involving misconduct occurring abroad. The Claimant’s tip was the first to alert the Commission, and their ongoing assistance—including document analysis, sworn testimony, identifying witnesses, and encouraging cooperation—was deemed indispensable to proving the case. The award, calculated as a percentage of monetary sanctions collected under Section 21F of the Securities Exchange Act of 1934, was granted due to the significance of the information, the level of cooperation, and the need to deter similar violations.
The U.S. Securities and Exchange Commission (SEC) awarded a whistleblower over $1.8 million for providing the first and original information that led to a successful enforcement action involving undisclosed securities violations occurring abroad. The Claimant’s tip was critical because the misconduct would have been difficult or impossible to detect without their input, particularly due to its offshore nature. The whistleblower provided extensive, ongoing assistance throughout the investigation, including reviewing documents, giving sworn testimony, identifying key witnesses, and encouraging others to cooperate with enforcement staff. The Claimant also internally reported the misconduct on multiple occasions, demonstrating a commitment to compliance. The SEC’s Claims Review Staff recommended an award percentage of the monetary sanctions collected, which the Commission adopted without contest after determining the information was highly significant and the assistance exceptional. The award was granted under Section 21F of the Securities Exchange Act of 1934, reflecting the Commission’s commitment to deterring fraud and incentivizing internal reporting. The decision underscores how whistleblower cooperation can be decisive in uncovering complex, cross-border financial misconduct.
Extracted insights
- $1.80M $1,800,000 $1M–$10M
- The Claims Review Staff issued a Preliminary Determination recommending that Claimant receive a whistleblower 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
- Claimant provided original information to the Commission that led to the successful enforcement of the above-referenced Covered Action
- The Commission consider the significance of information provided to the Commission
- Claimant’s tip cause Enforcement staff to open an investigation
- Claimant provide Enforcement staff with extensive and ongoing assistance during the course of the investigation
- Claimant continue to provide additional new information that advanced the investigation
- Claimant provide investigative leads including identifying witnesses and assisting Enforcement staff with testimony preparation
- Claimant encourage witnesses to cooperate with Enforcement staff
- Claimant internally report the conduct on multiple occasions
- Claimant’s information allow the Commission to bring a programmatically significant enforcement action
- The Commission adopt the Preliminary Determination of the CRS
- The Commission order Claimant shall receive an award of *** percent ( *** %) of the monetary sanctions collected in the Covered Action
1 Redacted UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 86803 / August 29, 2019 WHISTLEBLOWER AWARD PROCEEDING File No. 2019-9 In the Matter of the Claim for Award in connection with Notice of Covered Action: Redacted Redacted Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that (“Claimant”) receive a whistleblower award in the amount of Redacted percent ( *** %) of the monetary sanctions collected in the above-referenced Covered Action for a payout of more than $1,800,000. 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 above-referenced Covered Action pursuant to Section 21F(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) 1 and Rule 21F-3(a) thereunder. 2 Applying the award criteria specified in Rule 21F-6 of the Exchange Act to the specific facts and circumstances here, we find the proposed award amount is appropriate. 3 1 15 U.S.C. § 78u-6(b)(1). 2 17 C.F.R. § 240.21F-3(a). 3 In assessing the appropriate award amount, 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 2 In reaching that determination, we positively assessed the following facts: Claimant’s tip was the first information on the charged misconduct that the Commission received and caused Enforcement staff to open an investigation; Claimant provided Enforcement staff with extensive and ongoing assistance during the course of the investigation, including the review of documents and the provision of sworn testimony; Claimant continued to provide additional new information that advanced the investigation; Claimant provided investigative leads, including identifying witnesses and assisting Enforcement staff with testimony preparation; Claimant encouraged witnesses to cooperate with Enforcement staff; on multiple occasions, Claimant internally reported the conduct; and Claimant’s information allowed the Commission to bring a programmatically significant enforcement action. In addition, without Claimant’s tip, the violations at issue would have been difficult or impossible to identify and prove, in part, because the misconduct occurred abroad. Upon due consideration under Rules 21F-10(f) and (h) of the Exchange Act, the Preliminary Determination of the CRS is adopted. Accordingly, for the reasons set forth in the Preliminary Determination, it is hereby ORDERED that Claimant shall receive an award of *** percent ( *** %) of the monetary sanctions collected in the Covered Action. By the Commission. Eduardo A. Aleman Deputy Secretary systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. § 240.21F-6.
1 Redacted UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 86803 / August 29, 2019 WHISTLEBLOWER AWARD PROCEEDING File No. 2019-9 In the Matter of the Claim for Award in connection with Notice of Covered Action: Redacted Redacted Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that (“Claimant”) receive a whistleblower award in the amount of Redacted percent ( *** %) of the monetary sanctions collected in the above-referenced Covered Action for a payout of more than $1,800,000. 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 above-referenced Covered Action pursuant to Section 21F(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”)1 and Rule 21F-3(a) thereunder.2 Applying the award criteria specified in Rule 21F-6 of the Exchange Act to the specific facts and circumstances here, we find the proposed award amount is appropriate.3 1 15 U.S.C. § 78u-6(b)(1). 2 17 C.F.R. § 240.21F-3(a). 3 In assessing the appropriate award amount, 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 2 In reaching that determination, we positively assessed the following facts: Claimant’s tip was the first information on the charged misconduct that the Commission received and caused Enforcement staff to open an investigation; Claimant provided Enforcement staff with extensive and ongoing assistance during the course of the investigation, including the review of documents and the provision of sworn testimony; Claimant continued to provide additional new information that advanced the investigation; Claimant provided investigative leads, including identifying witnesses and assisting Enforcement staff with testimony preparation; Claimant encouraged witnesses to cooperate with Enforcement staff; on multiple occasions, Claimant internally reported the conduct; and Claimant’s information allowed the Commission to bring a programmatically significant enforcement action. In addition, without Claimant’s tip, the violations at issue would have been difficult or impossible to identify and prove, in part, because the misconduct occurred abroad. Upon due consideration under Rules 21F-10(f) and (h) of the Exchange Act, the Preliminary Determination of the CRS is adopted. Accordingly, for the reasons set forth in the Preliminary Determination, it is hereby ORDERED that Claimant shall receive an award of *** percent ( *** %) of the monetary sanctions collected in the Covered Action. By the Commission. Eduardo A. Aleman Deputy Secretary systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. § 240.21F-6.