In the Matter of the Claim for Award

UNITED STATES OF AMERICA 
before the 
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 81200 / July 25, 2017 
WHISTLEBLOWER AWARD PROCEEDING 
File No. 2017-12 
 
 
In the Matter of the Claim for Award 
 
in connection with 
 
Redacted 
Redacted 
Notice of Covered Action 
 
Redacted 
 
 
 
ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM 
 
On March 3, 2017, the Claims Review Staff issued a Preliminary Determination 
related to Notice of Covered Action 
Redacted 
which was issued in connection with the 
Commission’s successful resolution of the above-referenced enforcement action (the 
“Covered Action”).  The Preliminary Determination recommended that 
Redacted 
Redacted  
(“Claimant”) receive a whistleblower award because Claimant 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 Securities Exchange Act of 
1934 (the “Exchange Act”), 15 U.S.C. § 78u-6(b)(1), and Rule 21F-3(a) thereunder, 17 
C.F.R. § 240.21F-3(a). 
 
Further, the Claims Review Staff recommended that Claimant’s award be set in 
the amount of 
Redacted percent Redacted  of the monetary sanctions collected or to be collected 
in the Covered Action, which will yield an award of almost $2.5 million. In reaching this 
recommendation, the Claims Review Staff considered the factors set forth in Rule 21F-6, 
17 C.F.R. § 240.21F-6, in relation to the facts and circumstances of Claimant’s 
application.
1
 
 
On March 7, 2017, Claimant provided written notice to the Commission of 
Claimant’s decision not to contest the Preliminary Determination within the 60-day 
 
 
1 
The Preliminary Determination also recommended that a whistleblower award claim filed by a 
second claimant be denied.  This claimant did not seek reconsideration of the Preliminary Determination 
and, therefore, the Preliminary Determination as to  that claimant became the final order of the Commission 
pursuant to  Exchange Act Rule 21F-10(f), 17 C.F.R. § 240.21F-10(f). 

2 
 
deadline set out in Rule 21F-10(e) promulgated under the Exchange Act, 17 C.F.R. 
§ 240.21F-10(e). 
 
Upon due consideration under Rules 21F-10(f) and (h), 17 C.F.R. § 240.21F- 
10(f), (h), the Preliminary Determination of the Claims Review Staff is adopted, 
including the award determination.  The record demonstrates that Claimant has satisfied 
the criteria for an award.   Claimant, an employee of a domestic government agency, had 
become aware of certain improper conduct by a company.
2   
Claimant then reported these 
suspicions to the Commission, and provided supporting documentation, which caused the 
Commission to open an investigation.
3   
Claimant then continued to provide the 
 
 
 
2 
Generally speaking, an employee of a federal, state, or local government agency can – subject to 
the two statutory exceptions discussed below – be eligible for an award under our whistleblower program. 
As we explain, neither of the two statutory exceptions prevents an award here.  The first exception prohibits 
paying a whistleblower award to  an employee of “an appropriate regulatory agency.” See Exchange Act 
§ 21F(c)(2)(A)(i), 15 U.S.C. § 78u-6(c)(2)(A)(i).  Exchange Act Rule 21F-4(f) defines an “appropriate
 
regulatory agency” by reference to  Section 3(a)(34), which in  turn defines an “appropriate regulatory 
agency” as the Commission and any of the various banking agencies listed in  the definition, including the 
Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation.  This exception has no potential application to  Claimant given the 
governmental authority at which Claimant worked. 
The second exception prohibits an award to  an employee of “a law enforcement organization.” 
See Exchange Act § 21F(c)(2)(A)(v), 15 U.S.C. § 78u-6(c)(2)(A)(v), and Exchange Act Rule 21F-8(c)(1), 
17 C.F.R. § 240.21F-8(c)(1).  While neither the Exchange Act nor the whistleblower rules define “law 
enforcement organization,” the term is  generally understood as having to  do with the detection, 
investigation, or prosecution of potential violations of law. See Exchange Act §24(f)(4)(B) and (C), 15 
U.S.C. § 78x(f)(4)(B) and (C) (defining foreign and state law enforcement authorities as those that are
 
“empowered ... to  detect, investigate, or prosecute potential violations of law”).  To be sure, certain 
components of Claimant’s governmental employer have law enforcement responsibilities, but those 
responsibilities are housed in  a separate, different component of the agency at which Claimant works.  This 
raises an interpretive question whether the exclusion for employees of a “law enforcement organization” 
applies to  an entire governmental agency that may contain components with law enforcement 
responsibilities, or only to  those divisible sub-agency components that perform the law enforcement 
responsibilities.  While we do not address that question for all    cases given the myriad permutations of 
domestic governmental entities and agencies, here, we believe that the appropriate answer is  that the 
arguments for distinguishing the sub-agency that possesses the law enforcement responsibilities from the 
broader governmental agency are sufficiently strong to  allow us to make an award to  Claimant.  In reaching 
this conclusion, we are mindful that in  ordinary usage, an “organization” is  any structure within which 
individuals work toward a common purpose or goal. See definitions of “organization” in  Cambridge 
Dictionary at http://dictionary.cambridge.org/us/dictionary/english/organization (“a group whose members 
work together for a shared purpose in  a continuing way”); MacMillan Dictionary at 
http://www.macmillandictionary.com/us/dictionary/american/organization (“a group of people who have a 
particular shared purpose or interest, for example a political party or charity”); Merriam-Webster Dictionary 
at https://www.merriam-webster.com/dictionary/organization (“an administrative and functional
             
structure (such as a business or a political party)”.  Congress’s use of the word “organization” in  Section 
21F(c)(2)(A)(v) – as opposed to  “agency” or “authority” – suggests that it  is  reasonable to  interpret the 
exclusion flexibly and, in  appropriate cases such as this one, to  apply it  only to  employees of a clearly 
separate agency component that performs law enforcement functions, rather than to  all    employees of an 
entire agency that happens to have been granted law enforcement powers among its   many other separate 
responsibilities and powers. 
 
3 
We note that the record is  clear that this is  not a situation where a claimant sought to  circumvent 
the potential responsibilities that his or her government agency might have to  investigate or otherwise take 

3 
 
Commission with specific, timely, and credible information, helpful documents, 
significant ongoing assistance, and relevant testimony that accelerated the pace of the 
investigation. 
 
Conclusion 
 
Accordingly, it is hereby ORDERED that Claimant shall receive an award of 
Redacted 
percent 
Redacted  
of the monetary sanctions collected in this Covered Action, 
including any monetary sanctions collected after the date of this Order. 
 
By the Commission. 
 
 
Brent J.  Fields 
Secretary 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
action for the misconduct.  We express no view on how an award determination might differ under that 
alternative circumstance. 

UNITED STATES OF AMERICA 

before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 81200 / July 25, 2017 

WHISTLEBLOWER AWARD PROCEEDING 

File No. 2017-12 
 

 

In the Matter of the Claim for Award 
 

in connection with 
 

Redacted 

Redacted 

Notice of Covered Action 
 

Redacted 

 
 

 

ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM 
 

On March 3, 2017, the Claims Review Staff issued a Preliminary Determination 
related to Notice of Covered Action Redacted which was issued in connection with the 
Commission’s successful resolution of the above-referenced enforcement action (the 
“Covered Action”).  The Preliminary Determination recommended that Redacted 

Redacted  (“Claimant”) receive a whistleblower award because Claimant 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 Securities Exchange Act of 
1934 (the “Exchange Act”), 15 U.S.C. § 78u-6(b)(1), and Rule 21F-3(a) thereunder, 17 
C.F.R. § 240.21F-3(a). 

 
Further, the Claims Review Staff recommended that Claimant’s award be set in 

the amount of Redacted percent Redacted  of the monetary sanctions collected or to be collected 
in the Covered Action, which will yield an award of almost $2.5 million. In reaching this 
recommendation, the Claims Review Staff considered the factors set forth in Rule 21F-6, 
17 C.F.R. § 240.21F-6, in relation to the facts and circumstances of Claimant’s 
application.1 

 
On March 7, 2017, Claimant provided written notice to the Commission of 

Claimant’s decision not to contest the Preliminary Determination within the 60-day 
 

 

1 The Preliminary Determination also recommended that a whistleblower award claim filed by a 
second claimant be denied. This claimant did not seek reconsideration of the Preliminary Determination 
and, therefore, the Preliminary Determination as to that claimant became the final order of the Commission 
pursuant to Exchange Act Rule 21F-10(f), 17 C.F.R. § 240.21F-10(f). 



2  

deadline set out in Rule 21F-10(e) promulgated under the Exchange Act, 17 C.F.R. 
§ 240.21F-10(e). 

 
Upon due consideration under Rules 21F-10(f) and (h), 17 C.F.R. § 240.21F- 

10(f), (h), the Preliminary Determination of the Claims Review Staff is adopted, 
including the award determination.  The record demonstrates that Claimant has satisfied 
the criteria for an award.  Claimant, an employee of a domestic government agency, had 
become aware of certain improper conduct by a company.2   Claimant then reported these 
suspicions to the Commission, and provided supporting documentation, which caused the 
Commission to open an investigation.3   Claimant then continued to provide the 

 
 

 

2 Generally speaking, an employee of a federal, state, or local government agency can – subject to 
the two statutory exceptions discussed below – be eligible for an award under our whistleblower program. 
As we explain, neither of the two statutory exceptions prevents an award here. The first exception prohibits 
paying a whistleblower award to an employee of “an appropriate regulatory agency.” See Exchange Act 
§ 21F(c)(2)(A)(i), 15 U.S.C. § 78u-6(c)(2)(A)(i). Exchange Act Rule 21F-4(f) defines an “appropriate 
regulatory agency” by reference to Section 3(a)(34), which in turn defines an “appropriate regulatory 
agency” as the Commission and any of the various banking agencies listed in the definition, including the 
Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation. This exception has no potential application to Claimant given the 
governmental authority at which Claimant worked. 

The second exception prohibits an award to an employee of “a law enforcement organization.” 
See Exchange Act § 21F(c)(2)(A)(v), 15 U.S.C. § 78u-6(c)(2)(A)(v), and Exchange Act Rule 21F-8(c)(1), 
17 C.F.R. § 240.21F-8(c)(1). While neither the Exchange Act nor the whistleblower rules define “law 
enforcement organization,” the term is generally understood as having to do with the detection, 
investigation, or prosecution of potential violations of law. See Exchange Act §24(f)(4)(B) and (C), 15 
U.S.C. § 78x(f)(4)(B) and (C) (defining foreign and state law enforcement authorities as those that are 
“empowered … to detect, investigate, or prosecute potential violations of law”). To be sure, certain 
components of Claimant’s governmental employer have law enforcement responsibilities, but those 
responsibilities are housed in a separate, different component of the agency at which Claimant works. This 
raises an interpretive question whether the exclusion for employees of a “law enforcement organization” 
applies to an entire governmental agency that may contain components with law enforcement 
responsibilities, or only to those divisible sub-agency components that perform the law enforcement 
responsibilities. While we do not address that question for all cases given the myriad permutations of 
domestic governmental entities and agencies, here, we believe that the appropriate answer is that the 
arguments for distinguishing the sub-agency that possesses the law enforcement responsibilities from the 
broader governmental agency are sufficiently strong to allow us to make an award to Claimant. In reaching 
this conclusion, we are mindful that in ordinary usage, an “organization” is any structure within which 
individuals work toward a common purpose or goal. See definitions of “organization” in Cambridge 
Dictionary at http://dictionary.cambridge.org/us/dictionary/english/organization (“a group whose members 
work together for a shared purpose in a continuing way”); MacMillan Dictionary at 
http://www.macmillandictionary.com/us/dictionary/american/organization (“a group of people who have a 
particular shared purpose or interest, for example a political party or charity”); Merriam-Webster Dictionary 
at https://www.merriam-webster.com/dictionary/organization (“an administrative and functional       
structure (such as a business or a political party)”. Congress’s use of the word “organization” in Section 
21F(c)(2)(A)(v) – as opposed to “agency” or “authority” – suggests that it is reasonable to interpret the 
exclusion flexibly and, in appropriate cases such as this one, to apply it only to employees of a clearly 
separate agency component that performs law enforcement functions, rather than to all employees of an 
entire agency that happens to have been granted law enforcement powers among its many other separate 
responsibilities and powers. 

 
3 We note that the record is clear that this is not a situation where a claimant sought to circumvent 
the potential responsibilities that his or her government agency might have to investigate or otherwise take 

http://dictionary.cambridge.org/us/dictionary/english/organization
http://www.macmillandictionary.com/us/dictionary/american/organization
http://www.merriam-webster.com/dictionary/organization


3  

Commission with specific, timely, and credible information, helpful documents, 
significant ongoing assistance, and relevant testimony that accelerated the pace of the 
investigation. 

 
Conclusion 

 
Accordingly, it is hereby ORDERED that Claimant shall receive an award of 

Redacted percent Redacted  of the monetary sanctions collected in this Covered Action, 
including any monetary sanctions collected after the date of this Order. 

 
By the Commission. 

 
 

Brent J. Fields 
Secretary 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

action for the misconduct. We express no view on how an award determination might differ under that 
alternative circumstance. 


	UNITED STATES OF AMERICA
	Notice of Covered Action
	ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM
	On March 3, 2017, the Claims Review Staff issued a Preliminary Determination
	which was issued in connection with the
	Redacted  (“Claimant”) receive a whistleblower award because Claimant 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 Securities Exchange Act...
	Redacted  of the monetary sanctions collected or to be collected
	Commission with specific, timely, and credible information, helpful documents, significant ongoing assistance, and relevant testimony that accelerated the pace of the investigation.
	Redacted  of the monetary sanctions collected in this Covered Action,