In the Matter of the Claim for Award
The SEC awarded nearly $4 million to a whistleblower who provided original, detailed information that triggered and significantly advanced an enforcement action, with the award calculated as a percentage of monetary sanctions collected—including amounts deemed satisfied by payments to another government authority—after the whistleblower declined to contest the preliminary determination.
The SEC awarded nearly $4 million to a whistleblower who voluntarily provided original, specific information that led to the opening and successful resolution of a covered enforcement action. The award represents a percentage of the total monetary sanctions collected, including amounts deemed satisfied by payments to another governmental authority, which the SEC includes under its interpretation of the Dodd-Frank Act. The whistleblower’s industry expertise and ongoing cooperation enabled the SEC to conduct the investigation more efficiently, and the award was formally adopted after the claimant did not contest the preliminary determination under Rule 21F-10.
On April 25, 2017, the SEC formally awarded nearly $4 million to a whistleblower who provided original, detailed information that prompted the opening of a covered enforcement action. The whistleblower’s voluntary submission included industry-specific knowledge and sustained cooperation that significantly enhanced the Commission’s ability to investigate and resolve the matter with fewer resources. The award was calculated as a percentage of the total monetary sanctions collected in the action, and the SEC included amounts that were deemed satisfied by payments to another government authority, consistent with its prior interpretation of Section 21F(b)(1) of the Exchange Act. The Claims Review Staff recommended the award amount on March 3, 2017, and the whistleblower chose not to contest the preliminary determination within the 60-day window under Rule 21F-10(e). As a result, the SEC adopted the recommendation under Rules 21F-10(f) and (h), affirming the whistleblower’s eligibility and the propriety of the award amount. Although the specific entity or nature of the underlying fraud remains redacted, the decision underscores the SEC’s commitment to rewarding impactful whistleblower contributions that enable efficient enforcement. The award reflects the Commission’s application of Rule 21F-6 factors, including the significance, specificity, and timeliness of the information provided.
Extracted insights
- $4.00M $4 million $1M–$10M
- agency Securities and Exchange Commission
- person whistleblower award proceeding
- SEC issued Preliminary Determination on March 3, 2017
- Claimant provided original information to the Commission
- Claimant's information led to successful enforcement of the Covered Action
- CRS recommended whistleblower award of almost $4 million
- Claimant provided written notice of decision not to contest Preliminary Determination
- SEC adopted Preliminary Determination of the CRS
- Claimant satisfied criteria for whistleblower award
- Claimant's information caused staff to open the investigation
- Claimant provided extensive useful ongoing assistance including industry-specific knowledge
- SEC ordered Claimant shall receive whistleblower award of monetary sanctions
- Release No. 80521 issued on April 25, 2017
- File No. 2017-8 relates to Whistleblower Award Proceeding
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 80521 / April 25, 2017 WHISTLEBLOWER AWARD PROCEEDING File No. 2017-8 In the Matter of the Claim for Award in connection with Redacted Notice of Covered Action Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM On March 3, 2017, the Claims Review Staff (“CRS”) issued a Preliminary Determination related to Notice of Covered Action Redacted which was issued in connection with the above- referenced enforcement action (the “Covered Action”). The Preliminary Determination recommended that 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 CRS recommended that such 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 equal an award of almost $4 million. In arriving at this recommendation, the CRS 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. On March 3, 2017, Claimant provided written notice to the Commission of Claimant’s decision not to contest the Preliminary Determination within the 60-day 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) and (h), the Preliminary Determination of the CRS is adopted. The record demonstrates that Claimant has satisfied the criteria for a whistleblower award. Claimant’s detailed and specific information caused staff to open the investigation, and thereafter, Claimant provided extensive useful ongoing assistance, including industry-specific knowledge and expertise, that allowed the Commission to efficiently investigate and bring the underlying action with fewer resources. Accordingly, for the reasons set forth in the Preliminary Determination, it is hereby ORDERED that Claimant shall receive an award of Redacted percent Redacted sanctions collected in this Covered Action. 1 By the Commission. of the monetary Brent J. Fields Secretary 1 A portion of the monetary sanctions imposed in the Covered Action was “deemed satisfied” by payment of that amount to another governmental authority; this governmental authority is not one of the specifically enumerated authorities listed in Exchange Act Rule 21F-3(b)(1). As the Commission has previously explained, “[w]e interpret Section 21F(b)(1) of the Exchange Act, which provides for payment of awards based on ‘what has been collected of the monetary sanctions’ imposed in a Commission Covered Action, to include amounts that are deemed satisfied when collected in actions brought by other governmental authorities.” Order Determining Whistleblower Award Claim, Exchange Act Release No. 72301 (June 3, 2014). 2
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 80521 / April 25, 2017 WHISTLEBLOWER AWARD PROCEEDING File No. 2017-8 In the Matter of the Claim for Award in connection with Redacted Notice of Covered Action Redacted ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM On March 3, 2017, the Claims Review Staff (“CRS”) issued a Preliminary Determination related to Notice of Covered Action Redacted which was issued in connection with the above- referenced enforcement action (the “Covered Action”). The Preliminary Determination recommended that 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 CRS recommended that such 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 equal an award of almost $4 million. In arriving at this recommendation, the CRS 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. On March 3, 2017, Claimant provided written notice to the Commission of Claimant’s decision not to contest the Preliminary Determination within the 60-day 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) and (h), the Preliminary Determination of the CRS is adopted. The record demonstrates that Claimant has satisfied the criteria for a whistleblower award. Claimant’s detailed and specific information caused staff to open the investigation, and thereafter, Claimant provided extensive useful ongoing assistance, including industry-specific knowledge and expertise, that allowed the Commission to efficiently investigate and bring the underlying action with fewer resources. Accordingly, for the reasons set forth in the Preliminary Determination, it is hereby ORDERED that Claimant shall receive an award of Redacted percent Redacted sanctions collected in this Covered Action.1 By the Commission. of the monetary Brent J. Fields Secretary 1 A portion of the monetary sanctions imposed in the Covered Action was “deemed satisfied” by payment of that amount to another governmental authority; this governmental authority is not one of the specifically enumerated authorities listed in Exchange Act Rule 21F-3(b)(1). As the Commission has previously explained, “[w]e interpret Section 21F(b)(1) of the Exchange Act, which provides for payment of awards based on ‘what has been collected of the monetary sanctions’ imposed in a Commission Covered Action, to include amounts that are deemed satisfied when collected in actions brought by other governmental authorities.” Order Determining Whistleblower Award Claim, Exchange Act Release No. 72301 (June 3, 2014). 2