In the Matter of the Claims for Award

1 
 
UNITED STATES OF AMERICA 
before the 
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  82181 / November 30, 2017 
WHISTLEBLOWER AWARD PROCEEDING 
File No. 2018-2 
 
In the Matter of the Claims for Award 
in connection with 
Redacted 
 
Redacted 
 
 
 
Notice of Covered Action   
Redacted
 
 
ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS 
 
On July 27, 2016, the Claims Review Staff (“CRS”) issued a Preliminary Determination 
related to Covered Action 
Redacted 
(“Covered Action”). The Preliminary Determination 
recommended that 
Redacted 
(“Claimant #1”) and 
Redacted 
(“Claimant #2”) each 
receive a whistleblower award of  
****  
in the Covered Action.  The Preliminary Determination 
also recommended that the award applications submitted by  
Redacted  
(“Claimant #3”), 
Redacted 
(“Claimant #4”), 
Redacted 
(“Claimant #5”), 
Redacted
 
(“Claimant #6”),  and 
Redacted      
(“Claimant #7”) be denied.  Claimants #3, #4, #5, #6, and #7 
filed timely responses contesting the Preliminary Determination.
1
 
For the reasons stated below, we make the following determinations: Claimant #1’s 
claim is approved in the amount of  
****  
of the monetary sanctions collected in the Covered 
Action, for a payout of more than $8,000,000; Claimant #2’s claim is approved in the amount of 
****   
of the monetary sanctions collected in the Covered Action, for a payout of more than 
$8,000,000; and the applications submitted by Claimants #3, #4, #5, #6, and #7 are denied. 
 
 
1 
The Preliminary Determination further recommended that the award applications 
submitted by two other claimants be denied. Those two claimants failed to submit a response 
contesting the Preliminary Determination and, therefore, the Preliminary Determination denying 
their claims for awards have become the final order of the Commission with respect to their 
award applications. 

2 
 
I. Background 
 
A. The award program 
 
In 2010, Congress added Section 21F to the Securities Exchange Act of 1934 (the 
“Exchange Act”). Among other things, Section 21F authorizes the Commission to pay monetary 
awards—subject to certain limitations, exclusions, and conditions—to individuals who 
voluntarily provide the Commission with original information about a violation of the securities 
laws that leads to a successful Commission judicial or administrative action in which the 
monetary sanctions exceed $1,000,000. See Exchange Act §§ 21F(a) & (b). The total award 
amounts paid shall be “not less than 10 percent, in total, of what has been collected of the 
monetary sanctions” and “not more than 30 percent, in total, of what has been collected[.]”
2
 
B. Relevant facts 
On 
Redacted 
, the Commission filed a settled enforcement action against 
Redacted 
Redacted    
(hereinafter, “the Company”).  The Commission found that the Company  
Redacted
 
 
 
 
 
 
 
 
 
 
Redacted 
 
 
 
 
 
 
 
 
 
2 
Exchange Act § 21F(b)(1).  We note that, in the context of an award proceeding 
involving two or more meritorious whistleblower claimants, the award must be allocated among 
the claimants and may never exceed an aggregate percentage amount of 30% of the monetary 
sanctions collected. See Exchange Act Rule 21F-5(c) (explaining that “[i]f the Commission 
makes awards to more than one whistleblower in connection with the same action or related 
action,” then “in no event will the total amount awarded to all whistleblowers in the aggregate be 
... greater than 30 percent of the amount the Commission or the other authorities collect”). 

3 
 
Redacted 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In settlement of the violations, the Company agreed to pay 
Redacted
 
 
 
Because the monetary sanctions imposed on the Company exceeded the statutory 
threshold for a potential whistleblower award under Section 21F of the Exchange Act, the Office 
of the Whistleblower (“OWB”) posted Notice of Covered Action 
Redacted   
for the Covered 
Action. 
 
II. Claimant #1 
 
We find that Claimant #1 voluntarily provided original information to the Commission 
that led to the successful enforcement of the Covered Action pursuant to Section 21F(b)(1) of the 
Exchange Act and Rule 21F-3(a) promulgated thereunder, 17 C.F.R. § 240.21F-3(a). 
Based on our review of the record, including declarations from Commission staff who 
handled the Covered Action, we find the following events occurred with respect to Claimant #1’s 
award application. The investigation into the Covered Action (hereinafter, “the Investigation”) 
was opened on 
Redacted 
by staff in the Commission’s Division of Enforcement 
(“Enforcement”).  On that date, 
Redacted
 
 
.
3 
 
 
 
3 
In finding that Claimant #1 acted voluntarily as required by the statute and ourrules, we 
have relied on Exchange Act Rule 21F-4(a)(2), which states, as relevant here, that a claimant’s 
“submission of information to the Commission will be considered voluntary if [he/she] 
voluntarily provided the same information to” any authority of the federal government “prior to 
receiving a request, inquiry, or demand from the Commission.”  That rule is satisfied here 
because Claimant #1 provided the same information to  
Redacted  
prior to the Commission learning 
of the information and contacting Claimant #1.  We note that, in our view, the “same 
information” standard under Rule 21F-4(a)(2) is satisfied where, as here, a claimant’s submission 
of information to the other federal agency “relates to the subject matter of” the Commission’s 
later inquiry.  See Rule 21F-4(a)(1). 

4 
 
Enforcement staff thereafter contacted Claimant #1 and arranged to meet with 
Claimant #1 for the first time on 
Redacted      
.  During that meeting, Claimant #1 alleged 
various potential misconduct by the Company, including that the Company 
Redacted
 
Redacted 
This allegation would become the focus of staff’s 
Investigation and the cornerstone of the Commission’s subsequent action against the Company.
4 
Following the meeting, Enforcement staff arranged to meet with Claimant #1 again in  
****
 
Redacted 
Although Claimant #1 may not have complied with Exchange Act Rule 21F-9(d) at this 
time—an omission which might normally require an award denial—the CRS recommended that 
the Commission waive that rule here given certain highly unusual circumstances.
5 
In total, 
Claimant #1 communicated with Enforcement staff approximately 5-6 times during the 
Investigation, and provided additional, critical information that advanced the Investigation, 
including the identification of potentially relevant documents and witnesses. 
Based on the foregoing contributions that Claimant #1 made to the Commission’s 
successful pursuit of this Covered Action, and considering the relative contributions of 
Claimant #1 vis-à-vis the other meritorious whistleblower in this matter, we adopt the 
Preliminary Determination’s recommendation that Claimant #1 should receive 
****  
of the 
monetary sanctions collected in the Covered Action. In reaching this determination, we have 
carefully considered the award criteria specified in Exchange Act Rules 21F-5 and 21F-6 as they 
relate to Claimant #1’s contributions to the Covered Action. In particular, we considered the 
facts that Claimant #1 
Redacted
 
 
4 
The information that Claimant #1 provided for the first time on or before July 21, 2010, 
does not constitute original information under our rules. See Exchange Act Rule 21F-4(b)(1)(iv). 
5 
Pursuant to Rule 21F-9(d), individuals such as Claimant #1 who provided tips to the 
Commission after July 21, 2010, the date of enactment of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (“Dodd-Frank Act”), but before August 12, 2011, the effective 
date of the whistleblower rules, are required to have submitted original information in writing to 
the Commission in order to qualify as a whistleblower who could potentially obtain an award. 
Claimant #1 did not submit the original information in writing to the Commission. Nonetheless, 
we find that it is appropriate in the public interest and consistent with the protection of investors 
that we utilize our discretionary authority under Section 36(a) of the Exchange Act to waive the 
Rule 21F-9(d) “in writing” requirement in this matter given a number of highly unusual 
circumstances. Those circumstances include the following: (1) the Commission’s staff was 
already actively working with Claimant #1 before the enactment of the Dodd-Frank Act; (2) 
Claimant #1 provided the new post-Dodd-Frank Act information in the format that the 
Enforcement staff expressly requested—orally during an in-person meeting at the Commission’s 
office; and (3) the indicia of reliability and the certainty as to the time that the information was 
provided, which are principal policy rationales underlying the Rule 21F-9(d) writing 
requirement, are clearly satisfied in the context of this claim because it is undisputed that 
Claimant #1 met on 
Redacted
 
. 

5 
 
Redacted 
;  the  information  that  Claimant  #1  provided  to  the  Commission  was  significant;  and  
that Claimant #1 provided continuing and helpful assistance to the Enforcement staff during the 
Investigation that saved a substantial amount of time and resources in the Investigation. 
III. Claimant #2 
 
We find that Claimant #2 is an eligible whistleblower who voluntarily provided original 
information to the Commission that led to the successful enforcement of the Covered Action 
pursuant to Section 21F(b)(1) of the Exchange Act and Rule 21F-3(a) promulgated thereunder, 
17 C.F.R. § 240.21F-3(a). 
Based on our review of the record, including declarations from Commission staff who 
handled the Covered Action, we find the following events occurred with respect to Claimant #2’s 
award application. In 
Redacted     
,  Claimant #2, 
Redacted
 
Redacted   
, first contacted the Commission by submitting a tip about the Company through the 
Commission’s on-line Tips, Complaints, and Referrals (“TCR”) system.  In 
Redacted
 
Claimant #2 met with the staff on the Investigation to provide additional follow-up information 
in support of Claimant #2’s earlier submission. In 
Redacted  
, Claimant #2 provided 
further additional information under a Form TCR (Tip, Complaint, or Referral). Because 
Claimant #2 had extensive experience in  
Redacted
 
, Claimant #2’s submissions and assistance 
enabled the Enforcement staff to more fully and quickly understand the misconduct and to assess 
the legal consequences. 
On 
Redacted 
, Claimant #2 provided Enforcement staff with an expert report that 
Claimant #2 had commissioned from a  
Redacted 
firm 
Redacted 
by
 
Claimants #3 and #4. Significantly, Claimant #2’s attorney submitted this report as additional 
information under Claimant #2’s 
Redacted 
Form TCR.  Over the next year, the 
Redacted 
Redacted 
firm provided additional information in furtherance of Claimant #2’s application, 
including through the submission of letters dated   
Redacted
 
 
Based on Claimant #2’s contributions (including the submissions made on Claimant #2’s 
behalf by the 
Redacted 
firm that Claimant #2 had retained), and considering 
Claimant #2’s contributions vis-à-vis Claimant #1, we are awarding Claimant #2 
****  
of the 
monetary sanctions collected in the Covered Action.
6  
In reaching this determination, we have 
 
6 
As we discuss further below in the context of our analysis of the award claims submitted 
by Claimants #3 and #4, Claimant #2 advised us in making the award application that 
Claimant #2 intended to forgo any claim to an award based on the information that the 
Redacted 
Redacted   
firm submitted so that Claimants #3 and #4 could recover an award based on that 
information.  However, as we also discuss below, we have determined to deny an award to 

6 
 
carefully considered the award criteria specified in Exchange Act Rules 21F-5 and 21F-6.    In 
particular, we considered the facts that Claimant #2 
Redacted
 
Redacted 
the information that Claimant #2 provided to the 
Commission was significant; and that Claimant #2 (directly and through the 
Redacted
 
firm that Claimant #2 retained) provided continuing and helpful assistance to the Enforcement 
staff during the Investigation that saved a substantial amount of time and resources in the 
Investigation. 
IV. Claimants #3 and #4 
 
A. Background 
The award applications submitted by Claimants #3 and #4 are inextricably intertwined 
with Claimant #2’s application.  From approximately 
Redacted 
until 
Redacted 
, the 
Redacted 
firm 
Redacted 
by Claimants #3 and #4, acting as an expert 
retained by Claimant #2, provided information to the Commission in furtherance of 
Claimant #2’s whistleblowing activities. During this period, there was never any suggestion to 
the Commission that Claimants #3 and #4 were themselves seeking to be whistleblowers, nor 
during this period did Claimants #3 and #4 undertake the steps required to perfect their status as 
whistleblowers eligible for an award. 
This changed on or about 
Redacted 
, when Claimants #3 and #4—with 
Claimant #2’s express consent—submitted a Form TCR to the Commission to become 
whistleblowers in their own right and asked to have the 
Redacted     
expert report prepared by their 
Redacted 
firm (and other follow-up assistance) credited to them for purposes of any future award 
consideration. Notably, Claimant #2’s determination to authorize Claimants #3 and #4 to 
recover as whistleblowers in their own right for the expert assistance that their firm had 
originally provided on behalf of Claimant #2 occurred shortly after 
Redacted
 
 
 
 
 
 
 
 
Claimants #3 and #4.  As a result, we are treating Claimant #2’s decision to forgo an award 
based on that information as ineffective, as we believe that Claimant #2 based that decision on an 
(incorrect) expectation that  Claimants #3 and #4 would be able to recover an award directly 
from the Commission. Were we to do otherwise, it is possible that Claimants #3 and #4 might be 
prejudiced in their ability to receive any compensation from Claimant #2 based on Claimant #2’s 
award total.  See infra at 6-  7   (discussing 
Redacted
 
. 
 
7 
Redacted 

7 
 
Redacted 
 
 
 
 
 
 
.
8 
The CRS’s Preliminary Determination recommended that the Commission deny an award 
to Claimants #3 and #4. 
B. Analysis 
 
We find that the record does not support an award to Claimants #3 and #4. In discussing 
the grounds for our determination below, we address:  (1) the submissions made (and 
information shared) with the Commission before 
Redacted 
,  when 
Redact 
firm was serving as an expert for Claimant #2; (2) the Claimants’ 
Redacted 
TCR 
submission; and (3) the information Claimants #3 and #4 provided after the 
Redacted
 
submission.
9
 
 
1. Information provided before 
Redacted
 
With respect to the information and assistance that Claimants #3 and #4 provided in 
connection with the Covered Action before the submission of their 
Redacted 
Form TCR, 
Claimants #3 and #4 were not “whistleblowers” under Rule 21F-2(a)(1) of the Exchange Act. 
To qualify as a whistleblower, an individual must (among other things) provide 
information regarding a potential securities law violation to the Commission in the form and 
manner required by Rule 21F-9(a) of the Exchange Act.  This is an essential first step in the 
 
 
8 
We have observed that since 
Redacted
 
 
 
 
 
 
 
 
 
9 
As referenced above, see supra footnote 6, Claimant #2 sought to forgo an award on the 
expert report and other contributions from Claimants #3 and #4’s firm. Claimant #2’s apparent 
desire that Claimants #3 and #4 receive an award in their own right does not, however, impact 
our obligation to ensure that they meet the award criteria and conditions in Section 21F of the 
Exchange Act and our rules thereunder. 

8 
 
11 
sequence of required events to become eligible for an award. Failure to do so can result in the 
denial of an award application, even if the individual voluntarily provided original information to 
the Commission and that information led to the success of a covered action.
10
 
It is undisputed that Claimants #3 and #4 did not submit a Form TCR to become 
whistleblowers until 
Redacted 
. 
In the period before their TCR submission, Claimants #3 
and #4 (through 
Redacted
 
firm that Claimant #2 had retained on behalf of Claimant #2’s 
whistleblowing efforts) were acting as experts, and the information 
Redacted   
firm provided 
during this period was offered exclusively in furtherance of Claimant #2’s whistleblowing 
activities.
12 
Accordingly, they cannot seek an award based on those submissions or meetings.
13
 
In their response to the Preliminary Determination, Claimants #3 and #4 request that we 
use our discretionary authority under Exchange Act Rule 21F-8(a) to excuse their untimely 
submission of the 
Redacted 
Form TCR and, in doing so, to deem them whistleblowers for the 
preceding period.  In support of this relief, the Claimants identify various purported 
extraordinary circumstances that post-dated both their decision to have 
Redacted
 
firm serve as an expert on behalf of Claimant #2 and their initial submission pursuant to that 
arrangement.
14
 
 
 
 
10 
See Exchange Act § 21F(c)(2)(D). 
11 
See Exchange Act §§ 21F(a)(6), 21F(b)(1), & 21F(b)(2)(D).  See also Rule 21F-2(a)(1) & 
(2); Rule 21F-8(a). 
 
12 
With respect to the information provided during this period, we find that Claimant #3’s 
and #4’s award applications suffer from a separate, albeit related, defect. Specifically, neither 
claimant complied with the requirement in Exchange Act Rule 21F-9(b), which provides that, “to 
be eligible for an award, you must declare under penalty of perjury at the time you submit your 
information pursuant to paragraph (a)(1) or (2) of [Rule 21F-9] that your information is true and 
correct to the best of your knowledge and belief.” 
 
13 
The record indicates that the 
Redacted 
expert report and certain other assistance that 
Claimants #3 and #4 rely upon in seeking an award were provided by an incorporated entity— 
the  
Redacted 
firm  
Redacted 
—and not by Claimants #3                         
and #4 in their individual capacities. See  
Redacted 
Claimant #2’s Expert Report, n.1. The 
Redacted 
firm itself would be ineligible for an award for those submissions, because only 
individuals can qualify as whistleblowers under Section 21F. These additional considerations 
further counsel against any determination that would retroactively deem Claimants #3 and #4 in 
their individual capacities as whistleblowers before their 
Redacted 
Form TCR. 
14 
The specific circumstances that they identified include difficulties in 
Redacted
 
so 

9 
 
Under Rule 21F-8(a), “the Commission may, in its sole discretion, waive any of [the] 
procedures [for submitting information or making a claim for an award] based upon a showing of 
extraordinary circumstances.”  In determining whether a claimant has demonstrated 
extraordinary circumstances for purposes of Rule 21F-8(a) to excuse untimely submissions, we 
have previously looked to our decision in In the Matter of the Application of PennMont Sec.
15 
There, in determining whether extraordinary circumstances had been shown to permit an 
untimely filing under Commission Rule of Practice 420(b), 17 C.F.R. § 201.420(b), we 
explained that “the ‘extraordinary circumstances’ exception is to be narrowly construed and 
applied only in limited circumstances.”
16  
An extraordinary circumstance is one “where the 
reason for the failure timely to file was beyond the control of the applicant that causes the 
delay.”
17 
Moreover, subsequent events cannot be used to retroactively excuse an untimely 
submission.
18 
The critical question is whether the facts and circumstances that gave rise to the 
procedural deficiency were sufficiently beyond the control of the claimant to support an exercise 
of our discretionary authority under Rule 21F-8(a) to excuse the untimeliness. 
We find that Claimants #3 and #4 have failed to establish the existence of any 
“extraordinary circumstances” at the time of their procedural failures that would justify a waiver 
of our procedural requirements.  It is undisputed that the 
Redacted 
firm 
Redacted
 
Redacted 
agreed to produce an expert report (and to provide other assistance) for 
Claimant #2 on behalf of Claimant #2’s whistleblowing activities at the Commission. We find 
that their deliberate decision does not constitute an extraordinary circumstance that might excuse 
their failure timely to comply with Rule 21F-9’s requirements for becoming whistleblowers 
 
 
 
 
 
as to allow Claimants #3 and #4 to be treated as whistleblowers from the time that their firm’s 
expert report was first submitted to the Commission in Redacted 
.
 
15 
Exchange Act Release No. 61967, 2010 WL 1638720 (Apr. 23, 2010), aff’d PennMont 
Sec. v. SEC, 414 F. App’x 465 (3d Cir. 2011). 
 
16 
PennMont, 2010 WL 1638720 at *4. 
17 
Id.; see also Order Determining Whistleblower Award Claim, Exchange Act Release No. 
72178 (May 16, 2014); Order Determining Whistleblower Award Claim, Exchange Act Release 
No. 72659 (July 23, 2014); Order Determining Whistleblower Award Claim, Exchange Act 
Release No. 77368 (Mar. 14, 2016), aff’d sub nom. Cerny v. SEC, No. 16-934, 2017 WL 
3911581 (2d Cir. Sept. 7, 2017). 
18 
Exchange Act Release No. 72178, 2014 WL 1998521 (May 16, 2014) (finding that 
subsequent events did not excuse an untimely whistleblower award   application). 

10 
 
eligible for their own separate awards; accordingly, we decline to exercise our discretionary 
authority under Rule 21F-8(a).
19
 
 
2. The 
As we explain below, the 
Redacted 
 
 
Redacted 
TCR 
TCR cannot be the basis for an award because it 
neither contained original information nor led to the success of the Covered Action. 
(i) The 
Redacted 
TCR did not contain original 
information. 
Rule 21F-4(b)(1)(ii) provides both the general requirement that to qualify as original 
information, the information a whistleblower provides must “[n]ot already [be] known to the 
Commission from any other source,” and the exception for circumstances where the Commission 
already knows the information but the whistleblower is “the original source of the information.” 
Rule 21F-4(b)(5) defines “original source” in pertinent part as follows: “The Commission will 
consider you to be an original source of the same information that we obtain from another source 
if the information satisfies the definition of original information and the other source obtained 
the information from you or your representative.” Claimants #3 and #4 do not dispute that the 
Commission was already in possession of all of the information that they included in the  
Redacted
 
Redacted    
, but instead argue that they were the “original source” of that information.
20 
We 
reject that argument based on our determination that reading the original-source exception to 
cover Claimants #3 and #4 would be inconsistent with Rule 21F-4(b)(1)(ii)’s language and 
purpose and could undermine the proper functioning of our award program. 
First, as a textual matter, Rule 21F-4(b)(5) is best read to foreclose the suggestion that an 
expert retained by and working on behalf of a whistleblower could be viewed as an “original 
source” of information developed in the context of that contractual relationship and submitted on 
behalf of the whistleblower to the Commission.  By expressly distinguishing the “original 
source” from “the other source” that first provided the information to the Commission, the 
definition contemplates a degree of independence that is lacking in the relationship between a 
whistleblower and the whistleblower’s retained expert. In these circumstances, the expert is not 
reasonably viewed as an independent or separate “source”; rather, where an expert is hired to 
 
19 
Notably, as discussed above, 
Redacted
 
 
 
20    
See Claimants  #3  and  #4’s  Response  to  the  Preliminary  Determination  at  8  (“[W]hile  it      
was indeed known to the Commission from another source prior to us filing our own TCR, the 
‘other source,’ [Claimant #2], clearly obtained the information from us and has acknowledged 
this.”). 

11 
 
provide analysis and other services to assist a whistleblower in developing and presenting a 
claim to the Commission, the whistleblower is the only “source”—within the meaning of 
Rule 21F-4(b)—of information developed through or derived from the expert’s efforts and 
submitted to the Commission. 
That reading is also consistent with, and supported by, the rationale for the original- 
source exception provided during the rulemaking that produced Rule 21F-4(b). The proposing 
release identified two scenarios in which the Commission anticipated an “original source” 
satisfying the “original information” requirement: (1) where a whistleblower first reports the 
information to Congress, any other authority of the federal government, a state Attorney General 
or securities regulatory authority, any self-regulatory organization, or the Public Company 
Auditing Oversight Board, and that law-enforcement or regulatory authority provides the 
information to the Commission before the whistleblower does; or (2) where the whistleblower 
reports the information pursuant to an entity’s internal whistleblower, legal, or compliance 
procedures for reporting allegations of possible violations of law, and the entity then reports the 
information to the Commission before the whistleblower does. Applying the original-source 
exception in these two situations is consistent with the Commission’s interest in encouraging 
whistleblowers to come forward promptly by reporting to any appropriate law-enforcement or 
regulatory authority, or by reporting internally.
21
 
In crafting the original-source exception, we also left open the possibility that it could be 
applied in the context of multiple whistleblowers where an initial whistleblower submitted 
information to the Commission that he or she had obtained from an individual who later 
submitted the same information as a whistleblower. Although we could have adopted a narrower 
definition of original source that might have precluded subsequent whistleblowers from 
recovering in this scenario under the original-information requirement, we did not do so. This 
determination was based on the recognition that there could be some potential situations where 
having the initial whistleblower’s source come forward—even if he or she did not present new 
information that was unknown to the Commission—could still significantly contribute to the 
success of the Commission’s action.
22
 
 
 
21 
See Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the 
Securities Exchange Act of 1934, Exchange Act Release No. 34–63237, 75 Fed. Reg. 70488, 
70495 (Nov. 17, 2010).  Notably, whistleblowers who first report to one of the listed authorities 
or internally, and then follow-up by reporting to the Commission within 120 days, will get the 
additional benefit of being deemed to have “provided [the] information [to the Commission] as 
of the date of [the] original disclosure, report, or submission” for purposes of any award analysis. 
See Rule 21F-4(b)(7) (original-source lookbackrule). 
 
22 
See Securities Whistleblower Incentives and Protections (“Adopting Release”), Exchange 
Act Release No. 34-64545, 76 Fed. Reg. 34300, 34321 (June 13, 2011).  For example, the 

12 
 
Claimants #3 and #4 do not fit within any of the circumstances for which we crafted the 
original source rule. In particular, we do not discern any programmatic benefit from permitting 
Claimant #2’s hired experts to come forward separately as the original source of Claimant #2’s 
information, and as we discuss further below, a contrary result could negatively affect the 
whistleblower program. Further, given that Claimants #3 and #4 knowingly chose to participate 
in the whistleblower process as Claimant #2’s experts in the first instance, there is no inequity in 
not permitting Claimants #3 and #4 to fundamentally alter their role and claim to be the original 
source of Claimant #2’s information. 
Even apart from the foregoing rationale, we separately conclude that where an expert is 
retained by a whistleblower to provide information and analysis to the Commission on the 
whistleblower’s behalf, the retained expert should be deemed to have forfeited and waived any 
subsequent claim to being the original source of that information if such information was 
previously provided to the Commission by or on behalf of the whistleblower who retained the 
expert.  As a matter of policy, we believe that where an individual, such as an expert, is retained 
to perform services on behalf of a whistleblower or in furtherance of another’s whistleblowing 
activities, that individual cannot subsequently claim that the information that he or she provided 
to the whistleblower, and that was correspondingly submitted to the Commission on behalf of the 
whistleblower, as his or her own information eligible for award consideration. A contrary result 
could create a perverse incentive in future cases for retained experts (or other professionals 
retained to assist whistleblowers) to abandon their contractual claims and obligations with 
whistleblowers in order to pursue an award on their own behalf, and we do not believe that this 
would be consistent with the proper functioning of our award program because, among other 
things, it could discourage whistleblowers from retaining professionals to help them refine and 
supplement their tips.
23
 
 
 
 
whistleblower who was the original source might have first-hand knowledge and thus be able to 
provide particularly compelling testimony at trial; or the original source could be someone that 
the Commission is unaware of or could not reach, and whose involvement with the investigation 
could lead the wrongdoers to agree to a settlement. 
23 
With the exception of anonymous whistleblowers who are required to obtain counsel, see 
Exchange Act Rule 21F-7(b), we note that the Commission does not require whistleblowers to 
retain experts or other professionals to assist them in their whistleblowing. Moreover, nothing in 
our decision today is intended either to encourage or to discourage whistleblowers in seeking 
assistance from professionals. Whistleblowers who provide specific, credible, and timely 
information of securities law violations may be eligible for an award, including a full award of 
up to 30% of the monetary sanctions collected, whether or not their information is accompanied 
by expert knowledge or analysis, or provided with the assistance of a lawyer or other 
professional. 

13 
 
 
 
The 
Redacted 
(ii) The 
Redacted 
TCR did not lead to the success of the 
Covered Action. 
submission cannot be the basis for an award for a second critical 
reason: The submission did not lead to the success of the Covered Action within Exchange Act 
Rule 21F-4(c)(2).
24 
The Commission’s Investigation was already underway (and indeed nearly 
complete) when Claimants #3 and #4 made their 
Redacted 
submission.  As a result, in order 
to satisfy the “led to” requirement, they must demonstrate that their “submission significantly 
contributed to the success of the action.”
25 
Moreover, given Rule 21F-4(c)(2)’s use of the term 
“submission,” and not “information,” Claimants #3 and #4 may not piggyback off of the 
contributions to the Investigation that resulted from the earlier disclosures of the original 
information. Rather, they must demonstrate that something unique about their submission of 
information made an additional significant contribution to the success of the Covered Action.
26
 
But Claimants #3 and #4 have not shown that their 
Redacted 
submission itself 
contributed to the success of the action. And the declaration from the Enforcement staff member 
involved with the Covered Action explains that the investigative staff did not use the submission, 
as the same information was already in the staff’s possession. Nor is there any indication in the 
record that this is the rare situation where having an individual who claims to be the original 
source come forward to disclose information already known to the Commission somehow 
significantly contributed to the success of the Covered Action.  Accordingly, we find that the 
Redacted 
TCR did not lead to the success of the Covered Action. 
3. Information submitted after the 
Redacted 
TCR 
After Claimants #3 and #4 submitted their Form TCR (and thus for the first time 
qualified as whistleblowers), they provided certain limited new information to the Commission. 
However, we find that the record demonstrates that none of the information provided by 
Claimants #3 and #4 following the submission of their TCR led to the successful enforcement of 
the referenced Covered Action within the meaning of Section 21F(b)(1) of the Exchange Act and 
Rules 21F-3(a)(3) and 21F-4(c) thereunder. 
 
24 
The other prongs of Exchange Act Rule 21F-4(c) are not applicable here. 
25 
Rule 21F-4(c)(2) (emphasis added).  See also Adopting Release, 76 Fed. Reg. 34300, 
34321/3-34322/2 (explaining that in the case of two competing whistleblowers where the second 
whistleblower to come forward to the Commission was the original source, the second 
whistleblower in order to obtain an award will need to demonstrate that his submission 
“significantly contributed” to the enforcement action if the investigation was already ongoing 
when he came forward). 
26 
See Adopting Release, 76 Fed. Reg. 34322/1.  See also supra discussion at footnote 22. 

14 
 
* * * 
 
For the foregoing reasons, the award applications submitted by Claimants #3 and #4 are 
denied. 
 
V. Claimant #5’s Claim Is Denied 
 
A. Preliminary Determination 
 
The CRS preliminarily determined to deny Claimant #5’s award claim because 
Claimant #5’s information did not lead to the successful enforcement of the Covered Action 
within the meaning of Section 21F(b)(1) of the Exchange Act and Rules 21F-3(a)(3) and 21F- 
4(c) thereunder because none of the information caused the Commission to:  (i) commence an 
examination, (ii) open or reopen an investigation, or (iii) inquire into different conduct as part of 
a current Commission examination or investigation under Rule 21F-4(c)(1) of the Exchange Act; 
or significantly contributed to the success of a Commission judicial or administrative 
enforcement action under Rule 21F-4(c)(2) of the Exchange Act. In reaching this preliminary 
determination, the CRS considered record evidence—including a declaration from an 
Enforcement staff member assigned to the Investigation—that revealed that the information 
provided to the Commission by Claimant #5 did not help advance the Investigation and neither 
was used in nor affected the charges brought by the Commission in the Covered Action or the 
successful enforcement of the Covered Action. 
Although Claimant #5 provided information to the Commission in 
Redacted 
Redacted 
, that information was not received by the Enforcement staff working on the 
Investigation at that time. Rather, Claimant #5 met with Commission staff unrelated to the 
Investigation. The first time staff on the Investigation received any information from 
Claimant #5 was in 
Redacted      
.  The information provided by Claimant #5 at that time, 
consisting of 
Redacted 
, was duplicative of information and 
materials that Enforcement staff already knew of or had obtained during the course of the 
Investigation. 
Claimant #5 provided supplemental information to the staff on the Investigation in 
Redacted 
Redacted
(which was re-submitted in 
Redacted     
), met with staff in  
Redacted    
,  and provided 
additional information and documents to staff in 
Redacted 
.  However, the information 
provided by Claimant #5 in the supplemental submissions and during the 
Redacted    
meeting was 
largely duplicative of other information that staff had already received or had learned during the 
course of the Investigation. By the time staff received Claimant #5’s supplemental submissions 
and met with Claimant #5 in 
Redacted 
, the Investigation had been ongoing for over two 
and a half years and staff had already conducted significant investigative steps.  The 
Investigation also had been    
Redacted 
,  and 

15 
 
much of Claimant #5’s information was duplicative of information 
Redacted 
Redacted     
.
 
 
B. Response 
 
Claimant #5’s Response and the declaration submitted by Claimant #5’s counsel in 
support of the Response (hereinafter, “Counsel Declaration”) make numerous arguments 
challenging the Preliminary Determination. We identify herein only several of the principal 
contentions. 
First, Claimant #5 complains that Claimant #5 provided information to the Commission 
in 
Redacted 
concerning the conduct at issue in the Investigation —before 
Claimant #2—but that the CRS found Claimant #2’s information to be worthy of an award while 
preliminarily denying an award to Claimant #5. Claimant #5 surmises that this is the result of 
bias against Claimant #5. 
Second, Claimant #5 complains that not only did Claimant #5 submit information before 
Claimant #2, but that Claimant #5’s information was qualitatively better than the information 
provided by Claimant #2 (as well as by Claimant #1). 
Finally, Claimant #5 contends that the CRS credited Claimant #2 (through Claimant #2’s 
retained experts, Claimants #3 and #4) for providing information to staff in  
Redacted 
concerning 
Redacted 
, but that Claimant #5 had 
earlier provided the same information to the staff in Claimant #5’s 
Redacted
 
submissions, 
Redacted 
submission, and even in Claimant #5’s initial submissions in 
Redacted
 
**** 
27
 
 
 
27 
Claimant #5 raises several unpersuasive contentions concerning the administrative 
record. First, Claimant #5 argues that certain documents provided to Claimant #5 following the 
issuance of the Preliminary Determination, including an Enforcement staff declaration, were 
over-redacted, which Claimant #5 contends impaired Claimant #5’s ability to contest the 
Preliminary Determination. We have reviewed the redactions in the documents that Claimant #5 
has identified and find that Claimant #5 was not prejudiced as a result of those redactions, 
particularly given that the unredacted information that was provided to Claimant #5 not only 
sufficiently explained why the information Claimant #5 provided did not contribute to the 
Investigation, but also included substantial information demonstrating the value of the 
information provided by the other claimants. (Indeed, we think it fair to observe that the 
unredacted information that was provided to Claimant #5 enabled Claimant #5’s counsel to 
prepare a thorough and comprehensive Response to the Preliminary Determination.) Second, 
Claimant #5 contends that Claimant #5 should have been permitted to review the submissions 
made by other claimants, but here again we find that Claimant #5 was not prejudiced by the 
determination to withhold these materials from Claimant #5. Third, Claimant #5 contends that 
the staff should have included within the record internal SEC documents and communications 

16 
 
C. Analysis 
 
We find that the record firmly demonstrates that Claimant #5 did not provide information 
that led to the success of the Covered Action. In reaching this conclusion, we have carefully 
considered the entire record as it relates to Claimant #5’s award application, including the 
materials that Claimant #5 submitted in response to the Preliminary Determination and the 
detailed supplemental declaration prepared by an Enforcement staff member from the 
Investigation (“Supplemental Enforcement Declaration”). We find that the Supplemental 
Enforcement Declaration is comprehensive and persuasive, and incorporate the factual 
statements therein as our findings of fact. 
With respect to those contentions raised by Claimant #5 that we expressly identified 
above, we note that the Supplemental Enforcement Declaration demonstrates the following. 
First, the Enforcement staff on the Investigation received information from Claimant #2 (as well 
as from Claimant #1) before receiving any information from Claimant #5.
28 
Second, the 
information provided by Claimant #5 was not of a higher quality than the information provided 
by Claimant #2 (or Claimant #1). Lastly, the information that Enforcement staff on the 
Investigation received from Claimant #5 concerning 
Redacted
 
Redacted 
was not the same information that the staff subsequently received from 
Claimants #3 and #4, was not of the same high quality, and did not lead to the success of the 
Covered Action. 
 
 
 
 
evaluating the importance, value and merits of the various claimants’ submissions, and that 
without these materials, Claimant #5 cannot test the descriptions and conclusions contained in 
the Enforcement staff’s declaration. We reject this contention, as our whistleblower rules were 
carefully designed to prevent such broad-based discovery into the internal deliberative process 
files relating to Commission investigations and enforcement actions, and instead have provided 
that staff declarations should be the primary vehicle for relaying the staff’s assessment of the 
value and relevance of information provided by whistleblowers. Finally, Claimant #5 suggests 
that certain of Claimant #5’s supplemental submissions (specifically the submissions made in 
Redacted 
) were not included in the administrative record, but we find based on the 
declaration prepared by an OWB staff member that these materials were not in fact excluded 
from the record. 
28 
Claimant #5 re-submitted the
Redacted
information to the Enforcement staff on the 
Investigation in 
Redacted 
According to the Supplemental Enforcement Declaration, Claimant #5’s 
re-submitted information contained very little detail on the relevant issues and primarily 
consisted of publicly-available documents. As such, the information provided by Claimant #5 in 
Redacted
and re-submitted in
Redacted
did not add meaningfully to the information and materials that the 
Enforcement staff on the Investigation already knew of or which were publicly-available to the 
staff. 

17 
 
VI. Claimant #6’s Claim Is Denied 
 
A. CRS Preliminary Denial 
 
The CRS preliminarily determined to recommend that Claimant #6’s award claim be 
denied because Claimant #6’s information did not lead to the successful enforcement of the 
Covered Action. In 
Redacted 
, Enforcement staff on the Investigation received 
Claimant #6’s Form TCR, and on  
Redacted 
, had a conference call with Claimant #6 
and Claimant #6’s counsel.  Staff also received a supplemental submission from Claimant #6 in 
Redacted 
.  At the time Enforcement staff received Claimant #6’s submission in 
Redacted 
Redacted
they were close to finishing the Investigation. Claimant #6 did not provide any new 
information in the written submissions or during the conference call that added value to the case. 
Claimant #6’s information was largely duplicative of other information that staff had already 
received or had learned during the course of the Investigation. 
B. Response 
 
Claimant #6 contends that notwithstanding that Claimant #6 submitted information later 
than other whistleblowers and that much of the information may have been known, Claimant #6 
must have contributed to the success of the Covered Action given Claimant #6’s 
Redacted 
Redacted 
 
coupled 
with Claimant #6’s analysis and explanations.  As an example, Claimant #6 contends that during 
the call with the Enforcement staff in 
Claimant #6’s 
Redacted 
 
Redacted 
, the staff was very interested in 
Redacted 
.  Claimant #6 then points to the Commission Order which states that 
Redacted 
 
during the relevant time period, and Claimant #6 surmises that Claimant #6’s information during 
the call somehow contributed to this part of the Order. 
C. Analysis 
 
After reviewing the record, including Claimant #6’s Response, we find that the record 
conclusively shows that Claimant #6 did not provide original information that led to the 
successful enforcement of the Covered Action.  The record shows that by the time Enforcement 
staff had their conference call with Claimant #6 in 
from the Company documents 
Redacted 
 
Redacted 
, staff had already obtained 
, and two 
internal Commission industry experts had already 
Redacted 
.
29 
 
 
29 
Furthermore, we find that during their call in 
Claimant #6 for Claimant #6’s opinion on 
Redacted 
Redacted 
, staff did not ask 
but in fact Claimant #6, 
without solicitation or questioning from staff, volunteered Claimant #6’s belief that 
Redacted 
Redacted 

18 
 
Contrary to Claimant #6’s supposition, the 
Redacted 
stated in the Commission’s Order 
was based on a 
Redacted  
, and was not based on               
any information provided by Claimant #6 during the conference call or in the written 
submissions. 
None of the information provided by Claimant #6, including Claimant #6’s views about 
Redacted 
, helped advance the Investigation and was not used in or affected 
the charges brought by the Commission in the Covered Action or the successful enforcement of 
the Covered Action. 
VII. Claimant #7’s Claim is Denied 
 
A. CRS Preliminary Denial 
 
The CRS preliminarily determined to deny Claimant #7’s claim because Claimant #7’s 
information did not lead to the successful enforcement of the Covered Action. In doing so, the 
CRS relied on record evidence that demonstrated the facts described below. The first contact by 
the Enforcement staff on the Investigation with Claimant #7 was in 
Redacted  
at which point staff 
was almost finished with the Investigation.  Most of the information provided by Claimant #7 
was duplicative of other information that staff had already received or had learned during the 
course of the Investigation. However, there was one allegation made by Claimant #7 which staff 
was not aware, concerning certain incriminating statements purportedly made by 
Redacted
 
Redacted   
.  Staff took additional investigative steps to follow-up on Claimant #7’s allegation, but 
the staff was ultimately unable to substantiate this allegation. 
 
B. Claimant #7’s Response 
 
In the response, Claimant #7 contends that shortly after Claimant #7 provided 
information to the Enforcement staff about the incriminating statements, staff re-interviewed a 
witness. Relying on the Commission’s award determination in In the Matter of the Claim for 
Award, File No. 2016-09, Exchange Act Release No. 77833 (May 13, 2016) (“May 2016 
Order”), Claimant #7 contends that even if staff was not able to corroborate the incriminating 
statements, Claimant #7 still significantly contributed to the Covered Action because the 
evidence provided by Claimant #7, even though uncorroborated by the staff, contributed to 
accelerating resolution by generating sufficient concerns among Company personnel to motivate 
(or further motivate) a settlement of the Covered Action. 
C. Analysis 
 
Claimant #7’s argument that Claimant #7’s unsubstantiated allegations increased the 
Company’s willingness to more quickly settle the matter is based mainly on Claimant #7’s 
speculation and is inconsistent with the factual record. In 
Redacted      
, several months before 

19 
 
staff re-interviewed the witness, staff and counsel for the Company had already commenced 
settlement discussions, and before the re-interview, counsel for the Company had expressed a 
willingness and desire to engage in settlement discussions to bring a resolution to the matter. At 
no point during the settlement negotiations did the Company indicate that it was motivated to 
settle the charges or that it would agree to the penalty amount because of staff’s re-interview of 
the witness. 
Furthermore, there was nothing meaningful or of significance that the witness said during 
the re-interview that in any way affected the core findings of the Investigation that staff was 
discussing with the Company before the re-interview. And Company counsel did not indicate to 
staff, either during the re-interview or afterwards, that the information provided by the witness 
during the re-interview was alarming, surprising, or in any way changed the dynamics of the case 
or of their settlement position. 
As such, this case is unlike the Commission’s award determination in the May 2016 
Order. There, the Enforcement staff following the issuance of the Preliminary Determination 
provided additional record evidence that demonstrated that the claimant’s “information was 
meaningful and that it made a substantial and important contribution to the successful resolution 
of the Covered Action” in that it “caused Enforcement staff to focus on [the misconduct] when 
staff might otherwise not have done so, and this evidentiary development strengthened the 
Commission’s case by meaningfully increasing Enforcement staff’s leverage during the 
settlement negotiations.”
30
 
Here, there is no support in the record demonstrating that the unsubstantiated allegations 
had any effect whatsoever on the resolution of the Covered Action. 
But in any event, to be eligible for a whistleblower award as we interpret the relevant 
language of the statute and our rules, there must be some nexus between the information 
provided and the successful claims in the underlying enforcement action. We find that there is 
simply no such connection between the unsubstantiated allegations offered by Claimant #7 and 
the settled claims in the Covered Action. 
VIII. Conclusion 
 
 
 
 
Redacted 
Accordingly, it is ORDERED that Claimant #1 shall receive an award of 
of the monetary sanctions collected in the Covered Action. 
Redacted
percent
 
 
 
 
 
 
 
30 
May 2016 Order at 3. 

20 
 
ORDERED that Claimant #2 shall receive an award of 
Redacted
percent 
Redacted 
of the 
monetary sanctions collected in the Covered Action.
31
 
 
ORDERED that Claimant #3’s, Claimant #4’s, Claimant #5’s, Claimant #6’s, and 
Claimant #7’s whistleblower award claims are denied. 
By the Commission. 
 
 
 
 
Brent J. Fields 
Secretary 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31 
We are aware that on 
Redacted
 

1  

UNITED STATES OF AMERICA 
before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No.  82181 / November 30, 2017 
WHISTLEBLOWER AWARD PROCEEDING 

File No. 2018-2 
 

In the Matter of the Claims for Award 

in connection with 

Redacted 
 

Redacted 
 
 
 

Notice of Covered Action   Redacted
 

 

ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS 
 

On July 27, 2016, the Claims Review Staff (“CRS”) issued a Preliminary Determination 
related to Covered Action Redacted (“Covered Action”). The Preliminary Determination 
recommended that Redacted (“Claimant #1”) and Redacted (“Claimant #2”) each 
receive a whistleblower award of  ****  in the Covered Action.  The Preliminary Determination 
also recommended that the award applications submitted by  Redacted  (“Claimant #3”), 

Redacted (“Claimant #4”), Redacted (“Claimant #5”), Redacted
 

(“Claimant #6”), and Redacted      (“Claimant #7”) be denied.  Claimants #3, #4, #5, #6, and #7 
filed timely responses contesting the Preliminary Determination.1 

For the reasons stated below, we make the following determinations: Claimant #1’s 
claim is approved in the amount of  ****  of the monetary sanctions collected in the Covered 
Action, for a payout of more than $8,000,000; Claimant #2’s claim is approved in the amount of 

****   of the monetary sanctions collected in the Covered Action, for a payout of more than 
$8,000,000; and the applications submitted by Claimants #3, #4, #5, #6, and #7 are denied. 

 
 

1 The Preliminary Determination further recommended that the award applications 
submitted by two other claimants be denied. Those two claimants failed to submit a response 
contesting the Preliminary Determination and, therefore, the Preliminary Determination denying 
their claims for awards have become the final order of the Commission with respect to their 
award applications. 



2  

I. Background 
 

A. The award program 
 

In 2010, Congress added Section 21F to the Securities Exchange Act of 1934 (the 
“Exchange Act”). Among other things, Section 21F authorizes the Commission to pay monetary 
awards—subject to certain limitations, exclusions, and conditions—to individuals who 
voluntarily provide the Commission with original information about a violation of the securities 
laws that leads to a successful Commission judicial or administrative action in which the 
monetary sanctions exceed $1,000,000. See Exchange Act §§ 21F(a) & (b). The total award 
amounts paid shall be “not less than 10 percent, in total, of what has been collected of the 
monetary sanctions” and “not more than 30 percent, in total, of what has been collected[.]”2

 

B. Relevant facts 

On Redacted , the Commission filed a settled enforcement action against Redacted 

Redacted    (hereinafter, “the Company”).  The Commission found that the Company  Redacted
 

 
 
 
 
 
 
 
 
 

Redacted 

 
 
 
 
 
 
 
 
 

2 Exchange Act § 21F(b)(1).  We note that, in the context of an award proceeding 
involving two or more meritorious whistleblower claimants, the award must be allocated among 
the claimants and may never exceed an aggregate percentage amount of 30% of the monetary 
sanctions collected. See Exchange Act Rule 21F-5(c) (explaining that “[i]f the Commission 
makes awards to more than one whistleblower in connection with the same action or related 
action,” then “in no event will the total amount awarded to all whistleblowers in the aggregate be 
… greater than 30 percent of the amount the Commission or the other authorities collect”). 



3  

Redacted 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

In settlement of the violations, the Company agreed to pay Redacted
 

 
 

Because the monetary sanctions imposed on the Company exceeded the statutory 
threshold for a potential whistleblower award under Section 21F of the Exchange Act, the Office 
of the Whistleblower (“OWB”) posted Notice of Covered Action Redacted   for the Covered 
Action. 

 

II. Claimant #1 
 

We find that Claimant #1 voluntarily provided original information to the Commission 
that led to the successful enforcement of the Covered Action pursuant to Section 21F(b)(1) of the 
Exchange Act and Rule 21F-3(a) promulgated thereunder, 17 C.F.R. § 240.21F-3(a). 

Based on our review of the record, including declarations from Commission staff who 
handled the Covered Action, we find the following events occurred with respect to Claimant #1’s 
award application. The investigation into the Covered Action (hereinafter, “the Investigation”) 
was opened on Redacted by staff in the Commission’s Division of Enforcement 
(“Enforcement”).  On that date, Redacted

 

 

.3 

 
 
 

3 In finding that Claimant #1 acted voluntarily as required by the statute and ourrules, we 
have relied on Exchange Act Rule 21F-4(a)(2), which states, as relevant here, that a claimant’s 
“submission of information to the Commission will be considered voluntary if [he/she] 
voluntarily provided the same information to” any authority of the federal government “prior to 
receiving a request, inquiry, or demand from the Commission.”  That rule is satisfied here 
because Claimant #1 provided the same information to  Redacted  prior to the Commission learning 
of the information and contacting Claimant #1.  We note that, in our view, the “same 
information” standard under Rule 21F-4(a)(2) is satisfied where, as here, a claimant’s submission 
of information to the other federal agency “relates to the subject matter of” the Commission’s 
later inquiry.  See Rule 21F-4(a)(1). 



4  

Enforcement staff thereafter contacted Claimant #1 and arranged to meet with 
Claimant #1 for the first time on Redacted      .  During that meeting, Claimant #1 alleged 
various potential misconduct by the Company, including that the Company Redacted

 
Redacted This allegation would become the focus of staff’s 

Investigation and the cornerstone of the Commission’s subsequent action against the Company.4 

Following the meeting, Enforcement staff arranged to meet with Claimant #1 again in  ****
 

Redacted Although Claimant #1 may not have complied with Exchange Act Rule 21F-9(d) at this 
time—an omission which might normally require an award denial—the CRS recommended that 
the Commission waive that rule here given certain highly unusual circumstances.5 In total, 
Claimant #1 communicated with Enforcement staff approximately 5-6 times during the 
Investigation, and provided additional, critical information that advanced the Investigation, 
including the identification of potentially relevant documents and witnesses. 

Based on the foregoing contributions that Claimant #1 made to the Commission’s 
successful pursuit of this Covered Action, and considering the relative contributions of 
Claimant #1 vis-à-vis the other meritorious whistleblower in this matter, we adopt the 
Preliminary Determination’s recommendation that Claimant #1 should receive ****  of the 
monetary sanctions collected in the Covered Action. In reaching this determination, we have 
carefully considered the award criteria specified in Exchange Act Rules 21F-5 and 21F-6 as they 
relate to Claimant #1’s contributions to the Covered Action. In particular, we considered the 
facts that Claimant #1 Redacted

 

 

4 The information that Claimant #1 provided for the first time on or before July 21, 2010, 
does not constitute original information under our rules. See Exchange Act Rule 21F-4(b)(1)(iv). 

5 Pursuant to Rule 21F-9(d), individuals such as Claimant #1 who provided tips to the 
Commission after July 21, 2010, the date of enactment of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (“Dodd-Frank Act”), but before August 12, 2011, the effective 
date of the whistleblower rules, are required to have submitted original information in writing to 
the Commission in order to qualify as a whistleblower who could potentially obtain an award. 
Claimant #1 did not submit the original information in writing to the Commission. Nonetheless, 
we find that it is appropriate in the public interest and consistent with the protection of investors 
that we utilize our discretionary authority under Section 36(a) of the Exchange Act to waive the 
Rule 21F-9(d) “in writing” requirement in this matter given a number of highly unusual 
circumstances. Those circumstances include the following: (1) the Commission’s staff was 
already actively working with Claimant #1 before the enactment of the Dodd-Frank Act; (2) 
Claimant #1 provided the new post-Dodd-Frank Act information in the format that the 
Enforcement staff expressly requested—orally during an in-person meeting at the Commission’s 
office; and (3) the indicia of reliability and the certainty as to the time that the information was 
provided, which are principal policy rationales underlying the Rule 21F-9(d) writing 
requirement, are clearly satisfied in the context of this claim because it is undisputed that 
Claimant #1 met on Redacted

 

. 



5  

Redacted ; the information that Claimant #1 provided to the Commission was significant; and 
that Claimant #1 provided continuing and helpful assistance to the Enforcement staff during the 
Investigation that saved a substantial amount of time and resources in the Investigation. 

III. Claimant #2 
 

We find that Claimant #2 is an eligible whistleblower who voluntarily provided original 
information to the Commission that led to the successful enforcement of the Covered Action 
pursuant to Section 21F(b)(1) of the Exchange Act and Rule 21F-3(a) promulgated thereunder, 
17 C.F.R. § 240.21F-3(a). 

Based on our review of the record, including declarations from Commission staff who 
handled the Covered Action, we find the following events occurred with respect to Claimant #2’s 
award application. In Redacted     , Claimant #2, Redacted

 
Redacted   , first contacted the Commission by submitting a tip about the Company through the 

Commission’s on-line Tips, Complaints, and Referrals (“TCR”) system. In Redacted
 

Claimant #2 met with the staff on the Investigation to provide additional follow-up information 
in support of Claimant #2’s earlier submission. In Redacted  , Claimant #2 provided 
further additional information under a Form TCR (Tip, Complaint, or Referral). Because 
Claimant #2 had extensive experience in  Redacted

 

, Claimant #2’s submissions and assistance 
enabled the Enforcement staff to more fully and quickly understand the misconduct and to assess 
the legal consequences. 

On Redacted , Claimant #2 provided Enforcement staff with an expert report that 
Claimant #2 had commissioned from a Redacted firm Redacted by 
Claimants #3 and #4. Significantly, Claimant #2’s attorney submitted this report as additional 
information under Claimant #2’s Redacted Form TCR.  Over the next year, the Redacted 

Redacted firm provided additional information in furtherance of Claimant #2’s application, 
including through the submission of letters dated  Redacted

 

 
Based on Claimant #2’s contributions (including the submissions made on Claimant #2’s 

behalf by the Redacted firm that Claimant #2 had retained), and considering 
Claimant #2’s contributions vis-à-vis Claimant #1, we are awarding Claimant #2 ****  of the 
monetary sanctions collected in the Covered Action.6  In reaching this determination, we have 

 
6 As we discuss further below in the context of our analysis of the award claims submitted 
by Claimants #3 and #4, Claimant #2 advised us in making the award application that 
Claimant #2 intended to forgo any claim to an award based on the information that the Redacted 

Redacted   firm submitted so that Claimants #3 and #4 could recover an award based on that 
information.  However, as we also discuss below, we have determined to deny an award to 



6  

carefully considered the award criteria specified in Exchange Act Rules 21F-5 and 21F-6. In 
particular, we considered the facts that Claimant #2 Redacted

 
Redacted the information that Claimant #2 provided to the 

Commission was significant; and that Claimant #2 (directly and through the Redacted
 

firm that Claimant #2 retained) provided continuing and helpful assistance to the Enforcement 
staff during the Investigation that saved a substantial amount of time and resources in the 
Investigation. 

IV. Claimants #3 and #4 
 

A. Background 

The award applications submitted by Claimants #3 and #4 are inextricably intertwined 
with Claimant #2’s application. From approximately Redacted until Redacted , the 

Redacted firm Redacted by Claimants #3 and #4, acting as an expert 
retained by Claimant #2, provided information to the Commission in furtherance of 
Claimant #2’s whistleblowing activities. During this period, there was never any suggestion to 
the Commission that Claimants #3 and #4 were themselves seeking to be whistleblowers, nor 
during this period did Claimants #3 and #4 undertake the steps required to perfect their status as 
whistleblowers eligible for an award. 

This changed on or about Redacted , when Claimants #3 and #4—with 
Claimant #2’s express consent—submitted a Form TCR to the Commission to become 
whistleblowers in their own right and asked to have the Redacted     expert report prepared by their 

Redacted firm (and other follow-up assistance) credited to them for purposes of any future award 
consideration. Notably, Claimant #2’s determination to authorize Claimants #3 and #4 to 
recover as whistleblowers in their own right for the expert assistance that their firm had 
originally provided on behalf of Claimant #2 occurred shortly after Redacted

 

 
 
 
 
 
 
 

Claimants #3 and #4.  As a result, we are treating Claimant #2’s decision to forgo an award 
based on that information as ineffective, as we believe that Claimant #2 based that decision on an 
(incorrect) expectation that  Claimants #3 and #4 would be able to recover an award directly 
from the Commission. Were we to do otherwise, it is possible that Claimants #3 and #4 might be 
prejudiced in their ability to receive any compensation from Claimant #2 based on Claimant #2’s 
award total.  See infra at 6-7 (discussing Redacted

 

. 
 

7 Redacted 



7  

Redacted 
 
 
 
 
 
 

.8 

The CRS’s Preliminary Determination recommended that the Commission deny an award 
to Claimants #3 and #4. 

B. Analysis 
 

We find that the record does not support an award to Claimants #3 and #4. In discussing 
the grounds for our determination below, we address:  (1) the submissions made (and 
information shared) with the Commission before Redacted , when Redact 

firm was serving as an expert for Claimant #2; (2) the Claimants’ Redacted TCR 
submission; and (3) the information Claimants #3 and #4 provided after the Redacted

 

submission.9 
 

1. Information provided before Redacted
 

With respect to the information and assistance that Claimants #3 and #4 provided in 
connection with the Covered Action before the submission of their Redacted Form TCR, 
Claimants #3 and #4 were not “whistleblowers” under Rule 21F-2(a)(1) of the Exchange Act. 

To qualify as a whistleblower, an individual must (among other things) provide 
information regarding a potential securities law violation to the Commission in the form and 
manner required by Rule 21F-9(a) of the Exchange Act.  This is an essential first step in the 

 

 
8 We have observed that since Redacted

 

 
 
 
 
 
 
 
 

9 As referenced above, see supra footnote 6, Claimant #2 sought to forgo an award on the 
expert report and other contributions from Claimants #3 and #4’s firm. Claimant #2’s apparent 
desire that Claimants #3 and #4 receive an award in their own right does not, however, impact 
our obligation to ensure that they meet the award criteria and conditions in Section 21F of the 
Exchange Act and our rules thereunder. 



8  

11 

sequence of required events to become eligible for an award. Failure to do so can result in the 
denial of an award application, even if the individual voluntarily provided original information to 
the Commission and that information led to the success of a covered action.10

 

It is undisputed that Claimants #3 and #4 did not submit a Form TCR to become 
whistleblowers until 

Redacted 

. In the period before their TCR submission, Claimants #3 
and #4 (through Redacted

 firm that Claimant #2 had retained on behalf of Claimant #2’s 
whistleblowing efforts) were acting as experts, and the information Redacted   firm provided 
during this period was offered exclusively in furtherance of Claimant #2’s whistleblowing 
activities.12 Accordingly, they cannot seek an award based on those submissions or meetings.13

 

In their response to the Preliminary Determination, Claimants #3 and #4 request that we 
use our discretionary authority under Exchange Act Rule 21F-8(a) to excuse their untimely 
submission of the Redacted Form TCR and, in doing so, to deem them whistleblowers for the 
preceding period.  In support of this relief, the Claimants identify various purported 
extraordinary circumstances that post-dated both their decision to have Redacted

 

firm serve as an expert on behalf of Claimant #2 and their initial submission pursuant to that 
arrangement.14

 
 
 
 

10 See Exchange Act § 21F(c)(2)(D). 

11 See Exchange Act §§ 21F(a)(6), 21F(b)(1), & 21F(b)(2)(D).  See also Rule 21F-2(a)(1) & 
(2); Rule 21F-8(a). 

 
12 With respect to the information provided during this period, we find that Claimant #3’s 
and #4’s award applications suffer from a separate, albeit related, defect. Specifically, neither 
claimant complied with the requirement in Exchange Act Rule 21F-9(b), which provides that, “to 
be eligible for an award, you must declare under penalty of perjury at the time you submit your 
information pursuant to paragraph (a)(1) or (2) of [Rule 21F-9] that your information is true and 
correct to the best of your knowledge and belief.” 

 
13 The record indicates that the Redacted expert report and certain other assistance that 
Claimants #3 and #4 rely upon in seeking an award were provided by an incorporated entity— 
the  Redacted firm  Redacted —and not by Claimants #3                         
and #4 in their individual capacities. See  Redacted Claimant #2’s Expert Report, n.1. The 

Redacted firm itself would be ineligible for an award for those submissions, because only 
individuals can qualify as whistleblowers under Section 21F. These additional considerations 
further counsel against any determination that would retroactively deem Claimants #3 and #4 in 
their individual capacities as whistleblowers before their Redacted Form TCR. 

14 The specific circumstances that they identified include difficulties in Redacted
 

so 



9  

Under Rule 21F-8(a), “the Commission may, in its sole discretion, waive any of [the] 
procedures [for submitting information or making a claim for an award] based upon a showing of 
extraordinary circumstances.”  In determining whether a claimant has demonstrated 
extraordinary circumstances for purposes of Rule 21F-8(a) to excuse untimely submissions, we 
have previously looked to our decision in In the Matter of the Application of PennMont Sec.15 

There, in determining whether extraordinary circumstances had been shown to permit an 
untimely filing under Commission Rule of Practice 420(b), 17 C.F.R. § 201.420(b), we 
explained that “the ‘extraordinary circumstances’ exception is to be narrowly construed and 
applied only in limited circumstances.”16  An extraordinary circumstance is one “where the 
reason for the failure timely to file was beyond the control of the applicant that causes the 
delay.”17 Moreover, subsequent events cannot be used to retroactively excuse an untimely 
submission.18 The critical question is whether the facts and circumstances that gave rise to the 
procedural deficiency were sufficiently beyond the control of the claimant to support an exercise 
of our discretionary authority under Rule 21F-8(a) to excuse the untimeliness. 

We find that Claimants #3 and #4 have failed to establish the existence of any 
“extraordinary circumstances” at the time of their procedural failures that would justify a waiver 
of our procedural requirements.  It is undisputed that the Redacted firm Redacted

 
Redacted agreed to produce an expert report (and to provide other assistance) for 

Claimant #2 on behalf of Claimant #2’s whistleblowing activities at the Commission. We find 
that their deliberate decision does not constitute an extraordinary circumstance that might excuse 
their failure timely to comply with Rule 21F-9’s requirements for becoming whistleblowers 

 
 
 
 
 

as to allow Claimants #3 and #4 to be treated as whistleblowers from the time that their firm’s 
expert report was first submitted to the Commission in Redacted . 

15 Exchange Act Release No. 61967, 2010 WL 1638720 (Apr. 23, 2010), aff’d PennMont 
Sec. v. SEC, 414 F. App’x 465 (3d Cir. 2011). 

 
16 PennMont, 2010 WL 1638720 at *4. 

17 Id.; see also Order Determining Whistleblower Award Claim, Exchange Act Release No. 
72178 (May 16, 2014); Order Determining Whistleblower Award Claim, Exchange Act Release 
No. 72659 (July 23, 2014); Order Determining Whistleblower Award Claim, Exchange Act 
Release No. 77368 (Mar. 14, 2016), aff’d sub nom. Cerny v. SEC, No. 16-934, 2017 WL 
3911581 (2d Cir. Sept. 7, 2017). 

18 Exchange Act Release No. 72178, 2014 WL 1998521 (May 16, 2014) (finding that 
subsequent events did not excuse an untimely whistleblower award application). 



10  

eligible for their own separate awards; accordingly, we decline to exercise our discretionary 
authority under Rule 21F-8(a).19

 
 

2. The 

As we explain below, the 

Redacted 
 
 

Redacted 

TCR 

TCR cannot be the basis for an award because it 
neither contained original information nor led to the success of the Covered Action. 

(i) The Redacted TCR did not contain original 
information. 

Rule 21F-4(b)(1)(ii) provides both the general requirement that to qualify as original 
information, the information a whistleblower provides must “[n]ot already [be] known to the 
Commission from any other source,” and the exception for circumstances where the Commission 
already knows the information but the whistleblower is “the original source of the information.” 
Rule 21F-4(b)(5) defines “original source” in pertinent part as follows: “The Commission will 
consider you to be an original source of the same information that we obtain from another source 
if the information satisfies the definition of original information and the other source obtained 
the information from you or your representative.” Claimants #3 and #4 do not dispute that the 
Commission was already in possession of all of the information that they included in the  Redacted

 
Redacted    , but instead argue that they were the “original source” of that information.20 We 

reject that argument based on our determination that reading the original-source exception to 
cover Claimants #3 and #4 would be inconsistent with Rule 21F-4(b)(1)(ii)’s language and 
purpose and could undermine the proper functioning of our award program. 

First, as a textual matter, Rule 21F-4(b)(5) is best read to foreclose the suggestion that an 
expert retained by and working on behalf of a whistleblower could be viewed as an “original 
source” of information developed in the context of that contractual relationship and submitted on 
behalf of the whistleblower to the Commission.  By expressly distinguishing the “original 
source” from “the other source” that first provided the information to the Commission, the 
definition contemplates a degree of independence that is lacking in the relationship between a 
whistleblower and the whistleblower’s retained expert. In these circumstances, the expert is not 
reasonably viewed as an independent or separate “source”; rather, where an expert is hired to 

 

19 Notably, as discussed above, Redacted
 

 
 

20  See Claimants #3 and #4’s Response to the Preliminary Determination at 8 (“[W]hile it   
was indeed known to the Commission from another source prior to us filing our own TCR, the 
‘other source,’ [Claimant #2], clearly obtained the information from us and has acknowledged 
this.”). 



11  

provide analysis and other services to assist a whistleblower in developing and presenting a 
claim to the Commission, the whistleblower is the only “source”—within the meaning of 
Rule 21F-4(b)—of information developed through or derived from the expert’s efforts and 
submitted to the Commission. 

That reading is also consistent with, and supported by, the rationale for the original- 
source exception provided during the rulemaking that produced Rule 21F-4(b). The proposing 
release identified two scenarios in which the Commission anticipated an “original source” 
satisfying the “original information” requirement: (1) where a whistleblower first reports the 
information to Congress, any other authority of the federal government, a state Attorney General 
or securities regulatory authority, any self-regulatory organization, or the Public Company 
Auditing Oversight Board, and that law-enforcement or regulatory authority provides the 
information to the Commission before the whistleblower does; or (2) where the whistleblower 
reports the information pursuant to an entity’s internal whistleblower, legal, or compliance 
procedures for reporting allegations of possible violations of law, and the entity then reports the 
information to the Commission before the whistleblower does. Applying the original-source 
exception in these two situations is consistent with the Commission’s interest in encouraging 
whistleblowers to come forward promptly by reporting to any appropriate law-enforcement or 
regulatory authority, or by reporting internally.21

 

In crafting the original-source exception, we also left open the possibility that it could be 
applied in the context of multiple whistleblowers where an initial whistleblower submitted 
information to the Commission that he or she had obtained from an individual who later 
submitted the same information as a whistleblower. Although we could have adopted a narrower 
definition of original source that might have precluded subsequent whistleblowers from 
recovering in this scenario under the original-information requirement, we did not do so. This 
determination was based on the recognition that there could be some potential situations where 
having the initial whistleblower’s source come forward—even if he or she did not present new 
information that was unknown to the Commission—could still significantly contribute to the 
success of the Commission’s action.22

 
 
 

21 See Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the 
Securities Exchange Act of 1934, Exchange Act Release No. 34–63237, 75 Fed. Reg. 70488, 
70495 (Nov. 17, 2010).  Notably, whistleblowers who first report to one of the listed authorities 
or internally, and then follow-up by reporting to the Commission within 120 days, will get the 
additional benefit of being deemed to have “provided [the] information [to the Commission] as 
of the date of [the] original disclosure, report, or submission” for purposes of any award analysis. 
See Rule 21F-4(b)(7) (original-source lookbackrule). 

 
22 See Securities Whistleblower Incentives and Protections (“Adopting Release”), Exchange 
Act Release No. 34-64545, 76 Fed. Reg. 34300, 34321 (June 13, 2011).  For example, the 



12  

Claimants #3 and #4 do not fit within any of the circumstances for which we crafted the 
original source rule. In particular, we do not discern any programmatic benefit from permitting 
Claimant #2’s hired experts to come forward separately as the original source of Claimant #2’s 
information, and as we discuss further below, a contrary result could negatively affect the 
whistleblower program. Further, given that Claimants #3 and #4 knowingly chose to participate 
in the whistleblower process as Claimant #2’s experts in the first instance, there is no inequity in 
not permitting Claimants #3 and #4 to fundamentally alter their role and claim to be the original 
source of Claimant #2’s information. 

Even apart from the foregoing rationale, we separately conclude that where an expert is 
retained by a whistleblower to provide information and analysis to the Commission on the 
whistleblower’s behalf, the retained expert should be deemed to have forfeited and waived any 
subsequent claim to being the original source of that information if such information was 
previously provided to the Commission by or on behalf of the whistleblower who retained the 
expert.  As a matter of policy, we believe that where an individual, such as an expert, is retained 
to perform services on behalf of a whistleblower or in furtherance of another’s whistleblowing 
activities, that individual cannot subsequently claim that the information that he or she provided 
to the whistleblower, and that was correspondingly submitted to the Commission on behalf of the 
whistleblower, as his or her own information eligible for award consideration. A contrary result 
could create a perverse incentive in future cases for retained experts (or other professionals 
retained to assist whistleblowers) to abandon their contractual claims and obligations with 
whistleblowers in order to pursue an award on their own behalf, and we do not believe that this 
would be consistent with the proper functioning of our award program because, among other 
things, it could discourage whistleblowers from retaining professionals to help them refine and 
supplement their tips.23

 
 
 
 

whistleblower who was the original source might have first-hand knowledge and thus be able to 
provide particularly compelling testimony at trial; or the original source could be someone that 
the Commission is unaware of or could not reach, and whose involvement with the investigation 
could lead the wrongdoers to agree to a settlement. 

23 With the exception of anonymous whistleblowers who are required to obtain counsel, see 
Exchange Act Rule 21F-7(b), we note that the Commission does not require whistleblowers to 
retain experts or other professionals to assist them in their whistleblowing. Moreover, nothing in 
our decision today is intended either to encourage or to discourage whistleblowers in seeking 
assistance from professionals. Whistleblowers who provide specific, credible, and timely 
information of securities law violations may be eligible for an award, including a full award of 
up to 30% of the monetary sanctions collected, whether or not their information is accompanied 
by expert knowledge or analysis, or provided with the assistance of a lawyer or other 
professional. 



13  

 
 

The Redacted 

(ii) The Redacted TCR did not lead to the success of the 
Covered Action. 

submission cannot be the basis for an award for a second critical 
reason: The submission did not lead to the success of the Covered Action within Exchange Act 
Rule 21F-4(c)(2).24 The Commission’s Investigation was already underway (and indeed nearly 
complete) when Claimants #3 and #4 made their Redacted submission.  As a result, in order 
to satisfy the “led to” requirement, they must demonstrate that their “submission significantly 
contributed to the success of the action.”25 Moreover, given Rule 21F-4(c)(2)’s use of the term 
“submission,” and not “information,” Claimants #3 and #4 may not piggyback off of the 
contributions to the Investigation that resulted from the earlier disclosures of the original 
information. Rather, they must demonstrate that something unique about their submission of 
information made an additional significant contribution to the success of the Covered Action.26

 

But Claimants #3 and #4 have not shown that their Redacted submission itself 
contributed to the success of the action. And the declaration from the Enforcement staff member 
involved with the Covered Action explains that the investigative staff did not use the submission, 
as the same information was already in the staff’s possession. Nor is there any indication in the 
record that this is the rare situation where having an individual who claims to be the original 
source come forward to disclose information already known to the Commission somehow 
significantly contributed to the success of the Covered Action.  Accordingly, we find that the 

Redacted TCR did not lead to the success of the Covered Action. 

3. Information submitted after the Redacted TCR 

After Claimants #3 and #4 submitted their Form TCR (and thus for the first time 
qualified as whistleblowers), they provided certain limited new information to the Commission. 
However, we find that the record demonstrates that none of the information provided by 
Claimants #3 and #4 following the submission of their TCR led to the successful enforcement of 
the referenced Covered Action within the meaning of Section 21F(b)(1) of the Exchange Act and 
Rules 21F-3(a)(3) and 21F-4(c) thereunder. 

 
24 The other prongs of Exchange Act Rule 21F-4(c) are not applicable here. 

25 Rule 21F-4(c)(2) (emphasis added).  See also Adopting Release, 76 Fed. Reg. 34300, 
34321/3-34322/2 (explaining that in the case of two competing whistleblowers where the second 
whistleblower to come forward to the Commission was the original source, the second 
whistleblower in order to obtain an award will need to demonstrate that his submission 
“significantly contributed” to the enforcement action if the investigation was already ongoing 
when he came forward). 

26 See Adopting Release, 76 Fed. Reg. 34322/1.  See also supra discussion at footnote 22. 



14  

* * * 
 

For the foregoing reasons, the award applications submitted by Claimants #3 and #4 are 
denied. 

 

V. Claimant #5’s Claim Is Denied 
 

A. Preliminary Determination 
 

The CRS preliminarily determined to deny Claimant #5’s award claim because 
Claimant #5’s information did not lead to the successful enforcement of the Covered Action 
within the meaning of Section 21F(b)(1) of the Exchange Act and Rules 21F-3(a)(3) and 21F- 
4(c) thereunder because none of the information caused the Commission to:  (i) commence an 
examination, (ii) open or reopen an investigation, or (iii) inquire into different conduct as part of 
a current Commission examination or investigation under Rule 21F-4(c)(1) of the Exchange Act; 
or significantly contributed to the success of a Commission judicial or administrative 
enforcement action under Rule 21F-4(c)(2) of the Exchange Act. In reaching this preliminary 
determination, the CRS considered record evidence—including a declaration from an 
Enforcement staff member assigned to the Investigation—that revealed that the information 
provided to the Commission by Claimant #5 did not help advance the Investigation and neither 
was used in nor affected the charges brought by the Commission in the Covered Action or the 
successful enforcement of the Covered Action. 

Although Claimant #5 provided information to the Commission in Redacted 

Redacted , that information was not received by the Enforcement staff working on the 
Investigation at that time. Rather, Claimant #5 met with Commission staff unrelated to the 
Investigation. The first time staff on the Investigation received any information from 
Claimant #5 was in Redacted      .  The information provided by Claimant #5 at that time, 
consisting of Redacted , was duplicative of information and 
materials that Enforcement staff already knew of or had obtained during the course of the 
Investigation. 

Claimant #5 provided supplemental information to the staff on the Investigation in Redacted 

Redacted(which was re-submitted in Redacted     ), met with staff in  Redacted    , and provided 
additional information and documents to staff in Redacted .  However, the information 
provided by Claimant #5 in the supplemental submissions and during the Redacted    meeting was 
largely duplicative of other information that staff had already received or had learned during the 
course of the Investigation. By the time staff received Claimant #5’s supplemental submissions 
and met with Claimant #5 in Redacted , the Investigation had been ongoing for over two 
and a half years and staff had already conducted significant investigative steps.  The 
Investigation also had been    Redacted , and 



15  

much of Claimant #5’s information was duplicative of information Redacted 

Redacted     . 
 

B. Response 
 

Claimant #5’s Response and the declaration submitted by Claimant #5’s counsel in 
support of the Response (hereinafter, “Counsel Declaration”) make numerous arguments 
challenging the Preliminary Determination. We identify herein only several of the principal 
contentions. 

First, Claimant #5 complains that Claimant #5 provided information to the Commission 
in Redacted concerning the conduct at issue in the Investigation —before 
Claimant #2—but that the CRS found Claimant #2’s information to be worthy of an award while 
preliminarily denying an award to Claimant #5. Claimant #5 surmises that this is the result of 
bias against Claimant #5. 

Second, Claimant #5 complains that not only did Claimant #5 submit information before 
Claimant #2, but that Claimant #5’s information was qualitatively better than the information 
provided by Claimant #2 (as well as by Claimant #1). 

Finally, Claimant #5 contends that the CRS credited Claimant #2 (through Claimant #2’s 
retained experts, Claimants #3 and #4) for providing information to staff in  Redacted 

concerning Redacted , but that Claimant #5 had 
earlier provided the same information to the staff in Claimant #5’s Redacted

 

submissions, Redacted submission, and even in Claimant #5’s initial submissions in Redacted
 

**** 27 
 
 

27 Claimant #5 raises several unpersuasive contentions concerning the administrative 
record. First, Claimant #5 argues that certain documents provided to Claimant #5 following the 
issuance of the Preliminary Determination, including an Enforcement staff declaration, were 
over-redacted, which Claimant #5 contends impaired Claimant #5’s ability to contest the 
Preliminary Determination. We have reviewed the redactions in the documents that Claimant #5 
has identified and find that Claimant #5 was not prejudiced as a result of those redactions, 
particularly given that the unredacted information that was provided to Claimant #5 not only 
sufficiently explained why the information Claimant #5 provided did not contribute to the 
Investigation, but also included substantial information demonstrating the value of the 
information provided by the other claimants. (Indeed, we think it fair to observe that the 
unredacted information that was provided to Claimant #5 enabled Claimant #5’s counsel to 
prepare a thorough and comprehensive Response to the Preliminary Determination.) Second, 
Claimant #5 contends that Claimant #5 should have been permitted to review the submissions 
made by other claimants, but here again we find that Claimant #5 was not prejudiced by the 
determination to withhold these materials from Claimant #5. Third, Claimant #5 contends that 
the staff should have included within the record internal SEC documents and communications 



16  

C. Analysis 
 

We find that the record firmly demonstrates that Claimant #5 did not provide information 
that led to the success of the Covered Action. In reaching this conclusion, we have carefully 
considered the entire record as it relates to Claimant #5’s award application, including the 
materials that Claimant #5 submitted in response to the Preliminary Determination and the 
detailed supplemental declaration prepared by an Enforcement staff member from the 
Investigation (“Supplemental Enforcement Declaration”). We find that the Supplemental 
Enforcement Declaration is comprehensive and persuasive, and incorporate the factual 
statements therein as our findings of fact. 

With respect to those contentions raised by Claimant #5 that we expressly identified 
above, we note that the Supplemental Enforcement Declaration demonstrates the following. 
First, the Enforcement staff on the Investigation received information from Claimant #2 (as well 
as from Claimant #1) before receiving any information from Claimant #5.28 Second, the 
information provided by Claimant #5 was not of a higher quality than the information provided 
by Claimant #2 (or Claimant #1). Lastly, the information that Enforcement staff on the 
Investigation received from Claimant #5 concerning Redacted

 
Redacted was not the same information that the staff subsequently received from 

Claimants #3 and #4, was not of the same high quality, and did not lead to the success of the 
Covered Action. 

 
 
 
 

evaluating the importance, value and merits of the various claimants’ submissions, and that 
without these materials, Claimant #5 cannot test the descriptions and conclusions contained in 
the Enforcement staff’s declaration. We reject this contention, as our whistleblower rules were 
carefully designed to prevent such broad-based discovery into the internal deliberative process 
files relating to Commission investigations and enforcement actions, and instead have provided 
that staff declarations should be the primary vehicle for relaying the staff’s assessment of the 
value and relevance of information provided by whistleblowers. Finally, Claimant #5 suggests 
that certain of Claimant #5’s supplemental submissions (specifically the submissions made in 

Redacted ) were not included in the administrative record, but we find based on the 
declaration prepared by an OWB staff member that these materials were not in fact excluded 
from the record. 

28 Claimant #5 re-submitted theRedactedinformation to the Enforcement staff on the 
Investigation in Redacted According to the Supplemental Enforcement Declaration, Claimant #5’s 
re-submitted information contained very little detail on the relevant issues and primarily 
consisted of publicly-available documents. As such, the information provided by Claimant #5 in 
Redactedand re-submitted inRedacteddid not add meaningfully to the information and materials that the 
Enforcement staff on the Investigation already knew of or which were publicly-available to the 
staff. 



17  

VI. Claimant #6’s Claim Is Denied 
 

A. CRS Preliminary Denial 
 

The CRS preliminarily determined to recommend that Claimant #6’s award claim be 
denied because Claimant #6’s information did not lead to the successful enforcement of the 
Covered Action. In Redacted , Enforcement staff on the Investigation received 
Claimant #6’s Form TCR, and on  Redacted , had a conference call with Claimant #6 
and Claimant #6’s counsel.  Staff also received a supplemental submission from Claimant #6 in 

Redacted .  At the time Enforcement staff received Claimant #6’s submission in Redacted 

Redactedthey were close to finishing the Investigation. Claimant #6 did not provide any new 
information in the written submissions or during the conference call that added value to the case. 
Claimant #6’s information was largely duplicative of other information that staff had already 
received or had learned during the course of the Investigation. 

B. Response 
 

Claimant #6 contends that notwithstanding that Claimant #6 submitted information later 
than other whistleblowers and that much of the information may have been known, Claimant #6 
must have contributed to the success of the Covered Action given Claimant #6’s 

Redacted 

Redacted 
 

coupled 
with Claimant #6’s analysis and explanations.  As an example, Claimant #6 contends that during 
the call with the Enforcement staff in 
Claimant #6’s 

Redacted 
 

Redacted 
, the staff was very interested in 

Redacted .  Claimant #6 then points to the Commission Order which states that 
Redacted 

 
during the relevant time period, and Claimant #6 surmises that Claimant #6’s information during 
the call somehow contributed to this part of the Order. 

C. Analysis 
 

After reviewing the record, including Claimant #6’s Response, we find that the record 
conclusively shows that Claimant #6 did not provide original information that led to the 
successful enforcement of the Covered Action.  The record shows that by the time Enforcement 
staff had their conference call with Claimant #6 in 
from the Company documents 

Redacted 
 

Redacted 
, staff had already obtained 

, and two 

internal Commission industry experts had already Redacted 

.29 
 

 

29 Furthermore, we find that during their call in 
Claimant #6 for Claimant #6’s opinion on 

Redacted 

Redacted 
, staff did not ask 

but in fact Claimant #6, 
without solicitation or questioning from staff, volunteered Claimant #6’s belief that 

Redacted 

Redacted 



18  

Contrary to Claimant #6’s supposition, the Redacted stated in the Commission’s Order 
was based on a Redacted  , and was not based on               
any information provided by Claimant #6 during the conference call or in the written 
submissions. 

None of the information provided by Claimant #6, including Claimant #6’s views about 
Redacted , helped advance the Investigation and was not used in or affected 

the charges brought by the Commission in the Covered Action or the successful enforcement of 
the Covered Action. 

VII. Claimant #7’s Claim is Denied 
 

A. CRS Preliminary Denial 
 

The CRS preliminarily determined to deny Claimant #7’s claim because Claimant #7’s 
information did not lead to the successful enforcement of the Covered Action. In doing so, the 
CRS relied on record evidence that demonstrated the facts described below. The first contact by 
the Enforcement staff on the Investigation with Claimant #7 was in Redacted  at which point staff 
was almost finished with the Investigation.  Most of the information provided by Claimant #7 
was duplicative of other information that staff had already received or had learned during the 
course of the Investigation. However, there was one allegation made by Claimant #7 which staff 
was not aware, concerning certain incriminating statements purportedly made by Redacted

 
Redacted   .  Staff took additional investigative steps to follow-up on Claimant #7’s allegation, but 

the staff was ultimately unable to substantiate this allegation. 
 

B. Claimant #7’s Response 
 

In the response, Claimant #7 contends that shortly after Claimant #7 provided 
information to the Enforcement staff about the incriminating statements, staff re-interviewed a 
witness. Relying on the Commission’s award determination in In the Matter of the Claim for 
Award, File No. 2016-09, Exchange Act Release No. 77833 (May 13, 2016) (“May 2016 
Order”), Claimant #7 contends that even if staff was not able to corroborate the incriminating 
statements, Claimant #7 still significantly contributed to the Covered Action because the 
evidence provided by Claimant #7, even though uncorroborated by the staff, contributed to 
accelerating resolution by generating sufficient concerns among Company personnel to motivate 
(or further motivate) a settlement of the Covered Action. 

C. Analysis 
 

Claimant #7’s argument that Claimant #7’s unsubstantiated allegations increased the 
Company’s willingness to more quickly settle the matter is based mainly on Claimant #7’s 
speculation and is inconsistent with the factual record. In Redacted      , several months before 



19  

staff re-interviewed the witness, staff and counsel for the Company had already commenced 
settlement discussions, and before the re-interview, counsel for the Company had expressed a 
willingness and desire to engage in settlement discussions to bring a resolution to the matter. At 
no point during the settlement negotiations did the Company indicate that it was motivated to 
settle the charges or that it would agree to the penalty amount because of staff’s re-interview of 
the witness. 

Furthermore, there was nothing meaningful or of significance that the witness said during 
the re-interview that in any way affected the core findings of the Investigation that staff was 
discussing with the Company before the re-interview. And Company counsel did not indicate to 
staff, either during the re-interview or afterwards, that the information provided by the witness 
during the re-interview was alarming, surprising, or in any way changed the dynamics of the case 
or of their settlement position. 

As such, this case is unlike the Commission’s award determination in the May 2016 
Order. There, the Enforcement staff following the issuance of the Preliminary Determination 
provided additional record evidence that demonstrated that the claimant’s “information was 
meaningful and that it made a substantial and important contribution to the successful resolution 
of the Covered Action” in that it “caused Enforcement staff to focus on [the misconduct] when 
staff might otherwise not have done so, and this evidentiary development strengthened the 
Commission’s case by meaningfully increasing Enforcement staff’s leverage during the 
settlement negotiations.”30

 

Here, there is no support in the record demonstrating that the unsubstantiated allegations 
had any effect whatsoever on the resolution of the Covered Action. 

But in any event, to be eligible for a whistleblower award as we interpret the relevant 
language of the statute and our rules, there must be some nexus between the information 
provided and the successful claims in the underlying enforcement action. We find that there is 
simply no such connection between the unsubstantiated allegations offered by Claimant #7 and 
the settled claims in the Covered Action. 

VIII. Conclusion 
 
 
 
 

Redacted 
Accordingly, it is ORDERED that Claimant #1 shall receive an award of 
of the monetary sanctions collected in the Covered Action. 

Redactedpercent 

 
 
 
 
 

 

30 May 2016 Order at 3. 



20  

ORDERED that Claimant #2 shall receive an award of Redactedpercent Redacted of the 
monetary sanctions collected in the Covered Action.31

 
 

ORDERED that Claimant #3’s, Claimant #4’s, Claimant #5’s, Claimant #6’s, and 
Claimant #7’s whistleblower award claims are denied. 

By the Commission. 
 
 
 
 

Brent J. Fields 
Secretary 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

31 We are aware that on Redacted
 


	ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS
	I. Background
	B. Relevant facts
	II. Claimant #1
	III. Claimant #2
	IV. Claimants #3 and #4
	B. Analysis
	2. The
	(i) The Redacted TCR did not contain original information.
	(ii)  The Redacted TCR did not lead to the success of the Covered Action.
	V. Claimant #5’s Claim Is Denied
	B. Response
	C. Analysis
	VI. Claimant #6’s Claim Is Denied
	B. Response
	C. Analysis
	VII. Claimant #7’s Claim is Denied
	B. Claimant #7’s Response
	C. Analysis
	VIII. Conclusion