SEC Awards More Than $2.2 Million to Whistleblower Who First Reported Information to Another Federal Agency Before SEC
A former company insider received a $2.2 million SEC whistleblower award for reporting securities fraud to another federal agency and then submitting the same information to the SEC within the 120-day safe harbor period, triggering a successful enforcement action.
The SEC awarded more than $2.2 million to a former company insider whose tips led to an enforcement action after the whistleblower first reported the fraud to another federal agency and then submitted the same information to the SEC within 120 days under Rule 21F-4(b)(7). This marked the first award granted under the safe harbor provision, which allows the SEC to treat timely submissions to the agency as if filed originally with it. The whistleblower provided substantial cooperation during the investigation, and the award was funded entirely by monetary sanctions from violators, not harmed investors.
The SEC awarded more than $2.2 million to a former company insider who reported securities fraud, first to another federal agency and then to the SEC within the 120-day safe harbor period under Rule 21F-4(b)(7). Although the SEC opened its investigation after receiving the information from the other agency, it treated the whistleblower’s subsequent submission as if it had been made at the original reporting time, making the whistleblower eligible for an award. The whistleblower provided substantial cooperation throughout the investigation, which led to a successful enforcement action. This is the first award ever issued under the safe harbor provision, affirming that whistleblowers who report to multiple agencies can still qualify if they timely notify the SEC. The award is funded solely by monetary sanctions collected from securities law violators, with no funds taken from harmed investors. Since 2012, the SEC has paid over $264 million to 54 whistleblowers through its program. The SEC emphasized its commitment to protecting whistleblower confidentiality and encouraging reporting by ensuring that even non-lawyers who are unsure where to report can still qualify for rewards under the program.
Exhibits & Attached Documents (1)
Extracted insights
- $264.00M $264 million $100M–$1B
- $2.20M $2.2 million $1M–$10M
- $1.00M $1 million $1M–$10M
- person agency open investigation
- person federal agency
- company investor protection fund
- person jane norberg
- agency Securities and Exchange Commission
- person substantial cooperation
- SEC Announced Whistleblower Award of More Than $2.2 Million
- Former Company Insider Helped Agency Open Investigation
- Whistleblower Reported Information to Federal Agency
- Whistleblower Provided Information to SEC
- Federal Agency Referred Matter to SEC
- SEC Opened Investigation
- Whistleblower Provided Substantial Cooperation
- SEC Treated Submission as Submission to Other Agency
- Jane Norberg Said Whistleblowers May Not Always Know Where to Report
- SEC Has Awarded More Than $264 Million to 54 Whistleblowers
- Congress Established Investor Protection Fund
- SEC Protects Confidentiality of Whistleblowers
The Securities and Exchange Commission today announced a whistleblower award of more than $2.2 million to a former company insider whose tips helped the agency open an investigation that led to an enforcement action. The whistleblower first reported the information to another federal agency and later provided the same information to the SEC. This is the first award paid under the “safe harbor” of Exchange Act Rule 21F-4(b)(7), which provides that if a whistleblower submits information to another federal agency and submits the same information to the SEC within 120 days, then the SEC will treat the information as though it had been submitted to the SEC at the same time that it was submitted to the other agency. The whistleblower voluntarily reported information to a federal agency covered by the rule, which referred the matter to the SEC. The SEC then opened an investigation. Within 120 days of the initial report, the whistleblower provided the same information to the SEC and later provided substantial cooperation in the investigation. Although the SEC report came after the staff had opened its investigation, the SEC treated the submission as though it had been made when the whistleblower provided the information to the other agency. “Whistleblowers, especially non-lawyers, may not always know where to report, or may report to multiple agencies,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This award shows that whistleblowers can still receive an award if they first report to another agency, as long as they also report their information to the SEC within the 120-day safe harbor period and their information otherwise meets the eligibility criteria for an award.” The SEC has awarded more than $264 million to 54 whistleblowers since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.
The Securities and Exchange Commission today announced a whistleblower award of more than $2.2 million to a former company insider whose tips helped the agency open an investigation that led to an enforcement action. The whistleblower first reported the information to another federal agency and later provided the same information to the SEC. This is the first award paid under the “safe harbor” of Exchange Act Rule 21F-4(b)(7), which provides that if a whistleblower submits information to another federal agency and submits the same information to the SEC within 120 days, then the SEC will treat the information as though it had been submitted to the SEC at the same time that it was submitted to the other agency. The whistleblower voluntarily reported information to a federal agency covered by the rule, which referred the matter to the SEC. The SEC then opened an investigation. Within 120 days of the initial report, the whistleblower provided the same information to the SEC and later provided substantial cooperation in the investigation. Although the SEC report came after the staff had opened its investigation, the SEC treated the submission as though it had been made when the whistleblower provided the information to the other agency. “Whistleblowers, especially non-lawyers, may not always know where to report, or may report to multiple agencies,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This award shows that whistleblowers can still receive an award if they first report to another agency, as long as they also report their information to the SEC within the 120-day safe harbor period and their information otherwise meets the eligibility criteria for an award.” The SEC has awarded more than $264 million to 54 whistleblowers since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.