U.S. SecUritieS and exchange commiSSion

2013 AnnuAl RepoRt to congRess on the

Dodd-Frank

Whistleblower 

Program
diSclaimer

This is a report of the Staff of the U.S. Securities 

and Exchange Commission. The Commission 

has expressed no view regarding the analysis, 

findings, or conclusions contained herein.
CONTENTS

Message from the Chief of the Office of the Whistleblower . . . . . . . . . 1

History and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Overview of the Office of the Whistleblower . . . . . . . . . . . . . . . . . 5

Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Whistleblower Tips Received During Fiscal Year 2013 . . . . . . . . . . . 8

Subject of Whistleblower Complaints . . . . . . . . . . . . . . . . . . . . 8

Origin of Whistleblower Complaints . . . . . . . . . . . . . . . . . . . . 9

Processing of Whistleblower Tips During Fiscal Year 2013 . . . . . . . . 11

TCR Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Assistance by OWB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Whistleblower Awards Made During Fiscal Year 2013 . . . . . . . . . . 13

Process for Reviewing Applications for Awards . . . . . . . . . . . . . . 13

Whistleblower Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Securities and Exchange Commission Investor Protection Fund . . . . . 16

Evaluation of the Whistleblower Program by the Inspector General . . . 17

Appendix A

Whistleblower Tips by Allegation Type —Fiscal Year 2013 . . . . . . . . . . 19

Appendix B

Whistleblower Tips by Allegation Type— Comparison of 

Fiscal Years 2012 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Appendix C

Whistleblower Tips by Allegation Type— Comparison of 

Fiscal Years 2012 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Appendix D

Whistleblower Tips Received by Geographic Location 

International—Fiscal Year 2013 . . . . . . . . . . . . . . . . . . . . . . . . 22

Report available on the Web at:

http://www.sec.gov/about/offices/owb/annual-report-2013.pdf

dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 1

M e s s ag e f r o M t h e C h i e f o f t h e 

offiCe of the WhistlebloWer

Fiscal Year 2013 was a historic one for the Securities and Exchange Commission’s 

Office of the Whistleblower (“OWB” or the “Office”) During the year, the Office paid 

whistleblowers a total of over $14 million in recognition of their contributions to the 

success of enforcement actions pursuant to which ongoing frauds were stopped in their 

tracks While the amounts paid are significant, the bigger story is the untold numbers 

of current and future investors who were shielded from harm thanks to the information 

and cooperation provided by whistleblowers At the end of the day, protecting investors 

is what the whistleblower program is all about 

The program, which is administered through OWB, is now in its third year of 

operation The program was designed to incentivize individuals to provide the 

U S Securities and Exchange Commission (“Commission” or “SEC”) with specific, credible, and timely information about possible securities law violations, and 

thereby enhance the Commission’s ability to act swiftly to protect investors from 

harm and bring violators to justice Under the program, individuals who voluntarily provide the Commission with original information that leads to a successful 

enforcement action resulting in monetary sanctions of over $1,000,000, may be 

eligible to receive an award equal to 10-30% of the monies collected by the Commission or in a related action 

The Commission’s goal continues to be the receipt of high-quality information 

concerning potential securities law violations The number of whistleblower tips and 

complaints the Commission receives annually increased from 3,001 in the 2012 fiscal 

year to 3,238 in the 2013 fiscal year From the establishment of the whistleblower 

program in August 2011 until the end of Fiscal Year 2013, the Commission has received 

6,573 tips and complaints from whistleblowers 

Fiscal Year 2013 saw the Commission make its largest whistleblower award to date 

On September 30, 2013, the Commission awarded over $14 million to a whistleblower 

whose information led to an SEC enforcement action that recovered substantial investor 

funds In less than six months after receiving the whistleblower’s tip, the Commission 

was able to bring an enforcement action against the perpetrators and secure investor 

monies OWB hopes that award payments like this one will encourage individuals to 

come forward and assist the Commission in stopping securities fraud 

As mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act 

(“the Dodd-Frank Act”), the Commission’s Office of the Inspector General (“OIG”) 

conducted an audit of the Commission’s whistleblower program and released its report 

on January 18, 2013 OIG concluded that overall the Commission’s whistleblower 

program was effective and operated appropriately Specifically, OIG found that the 

Commission’s final rules implementing the whistleblower provisions of the Dodd-Frank 

Act to be clearly defined and user-friendly for those with a basic knowledge 

“At the end of

 the day, protecting 

investors is what the 

whistleblower program 

is all about.

”
2 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

of securities laws, rules and regulations OIG also concluded that OWB’s outreach 

efforts had been strong and that in general OWB was prompt in responding to 

information received from whistleblowers and in communicating with interested parties 

To further strengthen its internal controls, OIG recommended that OWB adopt key 

performance measures and metrics where appropriate In response, the Office developed 

key performance measures and metrics in 28 different areas 

One of the most crucial tenets by which OWB operates is the protection of a 

whistleblower’s identifying information OWB works with SEC Enforcement Division 

staff to protect whistleblower identities against disclosure The Commission also allows 

individuals who prefer to remain anonymous to the Commission to be eligible under 

the whistleblower program if they submit their whistleblower tip through an attorney 

Although they must disclose their identity to the Commission before they can be paid 

an award, the Commission does not publicly disclose whistleblower identities when it 

announces awards 

The Dodd-Frank Act extended anti-retaliation protections to Commission 

whistleblowers, which the Commission can enforce through civil enforcement actions 

in federal court or administrative proceedings The protection of whistleblowers 

from retaliation by their employers is important to the success of the whistleblower 

program Furthermore, the Commission’s rules prohibit any person from taking action 

to impede an individual from reporting a securities law violation to the Commission, 

including through the use of a confidentiality agreement OWB is coordinating actively 

with Enforcement Division staff to identify matters where employers may have taken 

retaliatory measures against individuals who reported potential securities law violations 

or have utilized confidentiality, severance, or other agreements in an effort to prohibit 

their employees from voicing concerns about potential wrongdoing 

Finally, OWB encourages anyone who believes they have information concerning a 

potential securities law violation to submit the tip via the online portal on OWB’s 

webpage (http://www sec gov/whistleblower) or by submitting a Form TCR by mail 

or fax, also located on OWB’s webpage If a whistleblower or his or her counsel has 

any question about how or whether to submit a tip to the Commission, or any other 

questions about the program, the individual should call the whistleblower hotline at 

(202) 551-4790 

OWB looks forward to the continued growth of the Commission’s whistleblower 

program OWB is poised to carry out the Commission’s mission of motivating 

whistleblowers to submit high-quality information that will lead to successful securities 

enforcement actions and better protect investors from financial fraud 

“The 

protection of 

whistleblowers 

from retaliation 

by their 

employers is 

important to the 

success of the 

whistleblower 

program.”

Sean X McKessy

Chief, Office of the Whistleblower
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 3

history and PurPose

The Dodd-Frank Act1 amended the Securities Exchange Act of 1934 (the 

“Exchange Act”)2 by, among other things, adding Section 21F3, entitled “Securities 

Whistleblower Incentives and Protection ” Section 21F directs the Commission 

to make monetary awards to eligible individuals who voluntarily provide original 

information that leads to successful Commission enforcement actions resulting in 

monetary sanctions over $1,000,000, and successful related actions 

Awards are required to be made in the amount equal to 10 to 30% of the monetary 

sanctions collected To ensure that whistleblower payments would not diminish the 

amount of recovery for victims of securities law violations, Congress established a 

separate fund, called the Investor Protection Fund (“Fund”), out of which eligible 

whistleblowers would be paid 

The Commission established OWB, a separate office within the Commission’s 

Division of Enforcement (“Enforcement”), to administer and effectuate 

the whistleblower program It is OWB’s mission to administer a vigorous 

whistleblower program that will help the Commission identify and halt frauds 

early and quickly to minimize investor losses 

In addition to establishing an awards program to encourage the submission of 

high quality information, the Dodd-Frank Act and the Commission’s implementing 

regulations (“the Final Rules”)4

 prohibit retaliation against whistleblowers who 

report possible wrongdoing based on a reasonable belief that a possible securities 

violation has occurred, is in progress or is about to occur 5

The whistleblower program was designed to complement, rather than replace, 

existing corporate compliance programs While it provides incentives for insiders 

and others with information about unlawful conduct to come forward, it also 

encourages them to work within their company’s own compliance structure 

Section 924(d) of the Dodd-Frank Act requires OWB to report annually to 

Congress on OWB’s activities, whistleblower complaints, and the response of the 

Commission to such complaints In addition, Section 21F(g)(5) of the Exchange 

Act requires the Commission to submit an annual report to Congress that 

addresses the following subjects: 

1

Pub L No 111-203, § 922(a), 124 Stat 1841(2010) 

2

15 U S C § 78a et seq.

3

15 U S C § 78u-6 

 4240 C F R §§ 21F-1 through 21F-17 

5

15 U S C § 78u-6(h)(1); 240 C F R § 21F-2(b) 
4 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

•	 The whistleblower award program, including a description of the 

number of awards granted and the type of cases in which awards 

were granted during the preceding fiscal year; 

•	 The balance of the Fund at the beginning of the preceding fiscal 

year; 

•	 The amounts deposited into or credited to the Fund during the 

preceding fiscal year; 

•	 The amount of earnings on investments made under Section 21F(g)(4) 

during the preceding fiscal year; 

•	 The amount paid from the Fund during the preceding fiscal year to 

whistleblowers pursuant to Section 21F(b); 

•	 The balance of the Fund at the end of the preceding fiscal year; and 

•	 A complete set of audited financial statements, including a balance sheet, 

income statement and cash flow analysis 6

This report has been prepared by OWB to satisfy the reporting 

obligations of Section 924(d) of the Dodd-Frank Act and Section 21F(g)(5) 

of the Exchange Act The sections in this report addressing the activities of OWB, 

the whistleblower tips received during Fiscal Year 2013, and the processing of 

those whistleblower tips primarily address the requirements of Section 924(d) 

of the Dodd-Frank Act The sections in this report addressing the whistleblower 

incentive awards made during Fiscal Year 2013 and the Fund primarily address 

the requirements of Section 21F(g)(5) of the Exchange Act 

6 In Fiscal Years 2011 and 2012, OWB submitted its report on the Dodd-Frank whistleblower program to 

Congress on November 15th to coincide with the submission of the Commission’s annual Agency Financial 

Report to Congress, which included audited financial information on the Fund However, because of the 

recent partial government shutdown, the annual Agency Financial Report will be submitted to Congress at 

a later date Therefore, the financial information contained in this report concerning the Fund (see page 16) 

is unaudited, and Congress will receive the audited financial information on the Fund when the Commission 

submits its 2013 Agency Financial Report 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 5

ov e r v i e W o f t h e o f f i C e o f 

the WhistlebloWer

organization

Section 924(d) of the Dodd-Frank Act directed the Commission to establish a 

separate office within the Commission to administer and to enforce the provisions 

of Section 21F of the Exchange Act On February 18, 2011, the Commission announced the appointment of Sean X McKessy to head the Office On January 17, 

2012, the Commission named Jane A Norberg as the Office’s Deputy Chief 

In addition to Mr McKessy and Ms Norberg, OWB currently is staffed by nine 

attorneys and three paralegals 

activities

Since its establishment, OWB has focused primarily on establishing the office and 

implementing the whistleblower program pursuant to the Dodd-Frank Act and the 

Commission’s Final Rules, which became effective on August 12, 2011 

During Fiscal Year 2013, the Office’s activities included the following:

•	 Communicating with whistleblowers who have submitted tips, additional 

information, claims for awards, and other correspondence to OWB 

The Office also met with whistleblowers, potential whistleblowers and 

their counsel, and consulted Enforcement staff to provide guidance to 

whistleblowers and their counsel 

•	 Staffing a publicly-available whistleblower hotline for members of the public 

to call with questions about the program The hotline was established in May 

2011 OWB attorneys return all calls within 24 business hours During the 

2013 fiscal year, the Office returned over 2,810 phone calls from members of 

the public 

•	 Reviewing and entering whistleblower tips received by mail and fax into the 

Commission’s Tips, Complaints, and Referrals System (the “TCR System”) 

•	 Working with Enforcement staff to identify and track all enforcement cases 

potentially involving a whistleblower to assist in the documentation of the 

whistleblower’s information and cooperation in anticipation of a potential 

claim for award 

•	 Posting on the OWB website a notice of every Commission action that resulted 

in monetary sanctions over $1,000,000, called a Notice of Covered Action 

(“NoCA”), for which a whistleblower who provided original information that 

led to the success of that enforcement action may seek an award 

“During the 2013 

fiscal year, the 

Office returned 

over 2,810 

phone calls from 

members of the 

public.”
6 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

•	 Reviewing and analyzing applications for whistleblower awards submitted 

in response to each posted NoCA OWB attorneys confer with Enforcement 

staff on the relevant covered action to determine the applicant’s assistance 

or contribution on the matter OWB attorneys then prepare a written 

recommendation concerning whether the Commission should issue an 

award to the applicant in that matter 

•	 Responding to requests by claimants to reconsider a preliminary 

determination of the Claims Review Staff to deny their application for an 

award This includes compiling and providing copies of the record which 

formed the basis of the preliminary determination to grant or deny an award, 

upon timely request by the claimant 

•	 Working with the Commission’s Office of Financial Management (“OFM”) to 

execute on the Commission’s approved awards and get payments to qualified 

whistleblowers promptly following the Commission’s Final Order 

•	 Maintaining and updating the OWB website to better inform the public 

about the whistleblower program (www sec gov/whistleblower) The website 

includes two videos by Mr McKessy providing an overview of the program 

and information about how tips, complaints and referrals are handled The 

website also contains detailed information about the program, copies of the 

forms required to submit a tip or claim an award, a listing of current and past 

NoCAs, links to helpful resources, and answers to frequently asked questions 

•	 Identifying and monitoring whistleblower complaints alleging retaliation by 

employers or former employers for reporting possible securities law violations 

internally or to the Commission The Commission has the authority to enforce 

the provisions of the Exchange Act, including the anti-retaliation provisions 

of Section 21F(h)(1) OWB works with Enforcement staff on potential antiretaliation enforcement actions where appropriate OWB also monitors federal 

court cases addressing the anti-retaliation provisions of the Dodd-Frank Act 

and the Sarbanes-Oxley Act of 2002 7

 In addition, OWB reviews employee 

confidentiality and other agreements provided by whistleblowers for potential 

concerns arising under Rule 21F-17 of the Exchange Act 8

 718 U S C § 1514A On July 17, 2013, the United States Court of Appeals for the Fifth Circuit in 

Asadi v. G.E. Energy (USA), L.L.C., 720 F 3d 620 (5th Cir 2013) held that the anti-retaliation provisions 

of the Dodd-Frank Act provide a private cause of action only for those employees who provide allegations 

of possible securities law violations directly to the Commission The Fifth Circuit’s decision in Asadi is 

contrary to several district court decisions and may contradict a Commission regulation that provides 

protection for employees from retaliation where they report possible securities violations to persons or 

authorities other than the Commission, including reporting internally District courts in both Colorado 

and California, however, have agreed with the Asadi holding 

 8Rule 21F-17(a) provides that “No person may take any action to impede an individual from 

communicating directly with the Commission staff about a possible securities law violation, including 

enforcing or threatening to enforce, a confidentiality agreement with respect to such communications ” 

240 C F R § 21F-17(a) 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 7

•	 Working together with the Commission’s Office of the Inspector General 

(“OIG”) in connection with the audit required of the Commission’s 

whistleblower program by Section 922 of the Dodd-Frank Act OIG issued 

a final report on January 18, 2013 (See pages 17-18 for a detailed discussion 

of the OIG’s findings ) 

•	 Developing and implementing key performance measures related to OWB’s 

internal controls to strengthen the whistleblower process in response to OIG’s 

evaluation of the whistleblower program 

•	 Providing training on the Dodd-Frank Act and the Commission’s implementing 

rules to Commission staff This included the posting of guidance on 

Commission intranet sites regarding whistleblower issues and rules OWB 

anticipates it will provide additional training to groups likely to be involved in 

whistleblower matters in the SEC’s Home Office, specialty units, and all eleven 

Regional Offices in the upcoming fiscal year 

•	 Providing guidance to Commission staff regarding the handling of confidential 

whistleblower-identifying information and the handling of potentially 

privileged information provided by whistleblowers 

•	 Coordinating with Commission staff in making external referrals to other 

government agencies consistent with the Dodd-Frank Act’s and the Final Rules’ 

confidentiality provisions 

•	 Conferring with regulators from other agencies’ whistleblower offices, 

including the Internal Revenue Service and the Commodity Futures Trading 

Commission, to discuss best practices and experiences 

•	 Actively publicizing the program through participation in webinars, media 

interviews, presentations, press releases, and other public communications 

For Fiscal Year 2013, OWB participated in seventeen public engagements and 

conducted several media interviews aimed at promoting and educating the 

public concerning the Commission’s whistleblower program 

•	 Working with the Commission’s Office of Information and Technology to 

develop a software solution that will assist and streamline OWB’s daily work 

flow and track the progress of whistleblower complaints synchronized with 

various Enforcement data systems 
8 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

W h i s t l e b loW e r t i P s r e C e i v e d 

during fisCal year 2013

The Final Rules specify that individuals who would like to be considered for a 

whistleblower award must submit their tip via the Commission’s online TCR 

questionnaire portal or by mailing or faxing their tip on Form TCR to OWB 9

OWB sends an acknowledgement or deficiency letter to whistleblowers for all 

complaints that are received by mail or fax, which includes a TCR submission 

number Whistleblowers who use the online portal to submit a complaint receive 

a computer-generated confirmation receipt and a TCR submission number All 

whistleblower tips received by the Commission are entered into the TCR System, 

the Commission’s centralized database for prioritization, assignment, and tracking

subject of Whistleblower Complaints

In Fiscal Year 2013, 3,238 whistleblower TCRs were received 10 By comparison, 

for Fiscal Year 2012, the Commission received 3,001 whistleblower TCRs The 

table below shows the number of whistleblower tips received by the Commission 

on a yearly basis since the inception of the whistleblower program:

 

FY201111 FY2012 FY2013

334 3,001 3,238

The most common complaint categories reported by whistleblowers in the 2013 

fiscal year were Corporate Disclosures and Financials (17 2%), Offering Fraud 

(17 1%), and Manipulation (16 2%) By comparison, in Fiscal Year 2012, the most 

common complaint categories reported by whistleblowers also were Corporate 

Disclosures and Financials (18 2%), Offering Fraud (15 5%), and Manipulation 

(15 2%) 

This is the first year for which the Commission has year-over-year data concerning 

the nature of the tips and complaints the Commission receives through its 

whistleblower program Appendix A shows the number of whistleblower tips, 

by allegation type and quarter, received during the 2013 fiscal year Appendix B 

provides a comparison between the number of whistleblower tips by allegation 

type that the Commission received during the 2012 and 2013 fiscal years As 

demonstrated by Appendix B, the most common complaint categories reported by 

whistleblowers have remained consistent between the prior and current fiscal years 

9

240 C F R § 21F-9(a) 

10The Commission also receives TCRs from individuals who do not wish or are not eligible to be considered 

for an award under the whistleblower program The data in this report is limited to those TCRs that include 

the required whistleblower declaration and does not reflect all TCRs received by the Commission during the 

fiscal year 

11Because the Final Rules became effective August 12, 2011, only 7 weeks of whistleblower data is available 

for Fiscal Year 2011 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 9

origin of Whistleblower Complaints

OWB publicizes and promotes the Commission’s whistleblower program through 

external speaking engagements, participation in panels, and discussions with the 

media OWB educates the public about the whistleblower program by having 

an accessible website and manning a whistleblower hotline As a result, the 

Commission receives whistleblower submissions from individuals throughout the 

United States as well as from individuals residing in foreign countries 

During Fiscal Year 2013, the Commission received whistleblower submissions from 

individuals in all fifty (50) states, as well as from the District of Columbia, and the 

U S territories of Puerto Rico, Guam, and the U S Virgin Islands, as reflected in 

the map below California, New York and Florida were the three states from which 

the highest number of whistleblower tips originated in the 2013 fiscal year 
10 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

Since the beginning of the whistleblower program, the Commission has received 

whistleblower tips from individuals in sixty-eight (68) countries outside the 

United States In Fiscal Year 2013 alone, the Commission received whistleblower 

submissions from individuals in fifty-five (55) foreign countries The map below 

reflects all countries in which whistleblower tips originated during Fiscal Year 

2013 

Appendices C and D, which accompany this report, provide more specific 

information concerning the sources of domestic and foreign whistleblower tips that 

the Commission received during the 2013 fiscal year 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 11

P r o C e s s i n g o f W h i s t l e b loW e r t i P s 

during fisCal year 2013

The Commission’s Office of Market Intelligence (“OMI”) within Enforcement 

evaluates incoming whistleblower TCRs and assigns specific, credible, and timely 

TCRs to members of Commission staff for further investigation or analysis 

tCr evaluation

OMI reviews every TCR submitted by a whistleblower to the Commission 

During the evaluation process, OMI staff examines each tip to identify those that 

are sufficiently specific, credible, and timely to warrant the additional allocation 

of Commission resources When OMI determines a complaint warrants deeper 

investigation, OMI staff assigns the complaint to one of the Commission’s 11 

regional offices, a specialty unit, or to an Enforcement Associate Director in the 

Home Office Complaints that relate to an existing investigation are forwarded to 

the staff working on the existing matter Tips that could benefit from the specific 

expertise of another Division or Office within the Commission generally are 

forwarded to staff in that Division or Office for further analysis 

The Commission may use information from whistleblower tips and complaints 

in several different ways For example, the Commission may initiate an 

enforcement investigation based on the whistleblower’s tip or complaint Even if a 

whistleblower’s tip does not cause an investigation to be opened, it may still help 

lead to a successful enforcement action if the whistleblower provides additional 

information that substantially contributes to an ongoing or active investigation 

Tips may also provide information that prompts the Commission to commence an 

examination of a regulated entity or a review of securities filings, which may lead 

to an enforcement action 

In certain instances, OMI may determine it is more appropriate that a 

whistleblower’s tip be investigated by another regulatory or law enforcement 

agency When this occurs, the Commission will forward the tip to the Commission 

point of contact for that agency, consistent with the confidentiality requirements of 

Section 21F(h)(2) of the Exchange Act Additionally, tips that relate to the financial 

affairs of an individual investor or a discrete investor group, usually are forwarded 

to the Commission’s Office of Investor Education and Advocacy (“OIEA”) for 

resolution Comments or questions about agency practice or the federal securities 

laws also are forwarded to OIEA 
12 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

assistance by oWb

OWB supports the tip allocation and investigative processes in several ways 

When whistleblowers submit tips on a Form TCR in hard copy via mail or 

fax, OWB enters this information into the TCR System so it can be evaluated 

by OMI 12 During the evaluation process, OWB may assist by contacting the 

whistleblower to obtain additional information to assist in the triage process 

During an investigation, OWB serves as a liaison as necessary between the 

whistleblower (and his or her counsel) and SEC investigative staff On occasion, 

OWB arranges meetings between whistleblowers and the subject matter experts 

on the Enforcement staff to assist in better understanding the whistleblower’s 

submissions and developing the facts of specific cases 

 

OWB staff also communicates frequently with Enforcement staff with respect to 

the timely documentation of information regarding the staff’s interactions with 

whistleblowers, the value of the information provided by whistleblowers, and the 

assistance provided by whistleblowers as the potential securities law violation is 

being investigated 

12Tips submitted by whistleblowers through the Commission’s online Tips, Complaints and Referrals 

questionnaire are automatically forwarded to OMI for evaluation 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 13

W h i s t l e b loW e r aWa r d s M a d e d u r i n g 

fisCal year 2013

Process for reviewing applications for awards

The Office posts on its website a Notice of Covered Action (“NoCA”) for each 

Commission enforcement action where a final judgment or order, by itself or 

together with other prior judgments or orders in the same action issued after 

July 21, 2010, results in monetary sanctions exceeding $1,000,000 OWB also 

announces on Twitter each time a new group of NoCAs is posted to its website, 

and sends email alerts to GovDelivery when its website is updated 13 In addition, 

whistleblowers may sign up to receive an update via email every time the list of 

NoCAs on OWB’s website is updated Once a NoCA is posted, individuals have 

90 calendar days to apply for an award by submitting a completed Form WB-APP 

to OWB by the claim due date listed for that action 14

During Fiscal Year 2013, OWB posted 118 Notices of Covered Action for 

enforcement judgments and orders issued during the applicable period that 

included the imposition of sanctions exceeding the statutory threshold of 

$1,000,000 15 Since the program’s inception, OWB has posted 431 NoCAs 

to its website 

OWB analyzes each application for a whistleblower award, working with 

Enforcement staff responsible for the relevant action to understand the 

contribution or involvement the applicant had in the matter OWB then prepares a 

written recommendation as to whether the applicant should receive an award, and 

if so, the percentage of the award 

The Claims Review Staff, designated by the Co-Directors of Enforcement, reviews 

OWB’s recommendation in accordance with the criteria set forth in the DoddFrank Act and the Final Rules The Claims Review Staff currently is comprised of 

three senior officers in Enforcement, including one of the Co-Directors The Claims 

Review Staff then issues a Preliminary Determination setting forth its assessment as 

to whether the claim should be allowed or denied and, if allowed, setting forth the 

proposed award percentage amount 16

If a claim is denied and the applicant does not object within the statutory 

time period, then the Preliminary Determination of the Claims Review Staff 

becomes the Final Order of the Commission However, an applicant can request 

reconsideration and has 30 calendar days to request a copy of the record that 

“Since the 

program’s 

inception, OWB 

has posted 431 

NoCAs to its 

website.” 13GovDelivery is a vendor that provides communications for public sector clients 

14240 C F R §§ 21F-10(a), (b) 

15By posting a Notice of Covered Action for a particular case, the Commission is not making a determination 

either that (i) a whistleblower tip, complaint or referral led to the Commission opening an investigation or 

filing an action with respect to the case or (ii) an award to a whistleblower will be paid in connection with 

the case 

16240 C F R § 21F-10(d) 
14 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

formed the basis of the Claims Review Staff’s decision or to request a meeting with 

OWB Whistleblowers can seek reconsideration with OWB by submitting a written 

response within 60 calendar days of the later of (i) the date of the Preliminary 

Determination, or (ii) the date when OWB made materials available for the 

whistleblower’s review 17 OWB considers the issues and grounds advanced in the 

applicant’s response, along with any supporting documentation provided, and 

makes its recommendation to the Claims Review Staff After this additional review, 

the Claims Review Staff issues a Proposed Final Determination, and the matter is 

forwarded to the Commission for its decision 18

All Preliminary Determinations of the Claims Review Staff that involve an award 

of money also are forwarded to the Commission for consideration as Proposed 

Final Determinations irrespective of whether the applicant objected to the 

Preliminary Determination 19 These procedures ensure that the Commission makes 

the final decision for all claims in which (1) a monetary award is recommended or 

(2) there is a preliminary denial of claims to which the applicant objects 

Within 30 days of receiving notice of the Proposed Final Determination, any 

Commissioner may request that the Proposed Final Determination be reviewed 

by the Commission If no Commissioner requests such a review within the 

30-day period, then the Proposed Final Determination becomes the Final Order 

of the Commission In the event a Commissioner requests a review, the 

Commission reviews the record that the Claims Review Staff relied upon in 

making its determination and issues its Final Order 20 

Whistleblower Awards

Since the inception of the Commission’s whistleblower program in August 

2011, the Commission has granted awards to six whistleblowers, with four 

whistleblowers receiving awards in Fiscal Year 2013 In each instance, the 

whistleblower provided high-quality original information that allowed the 

Commission to more quickly unearth and investigate the securities law violation, 

thereby better protecting investors from further financial injury and helping to 

conserve limited agency resources 

“Since the 

inception of the 

Commission’s 

whistleblower 

program in 

August 2011, 

the Commission 

has granted 

awards to six 

whistleblowers...”

17240 C F R § 21F-10(e) 

18240 C F R §§ 21F-10(g), (h) 

19240 C F R §§ 21F-10(f), (h) 

20240 C F R § 21F-10(h) A whistleblower’s rights of appeal from a Commission Final Order are set 

forth in Section 21F(f) of the Exchange Act, 15 U S C § 78u-6(f), and Rule 21F-13(a) of the Final Rules, 

240 C F R § 21F-13(a) 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 15

On August 21, 2012, the Commission announced its first whistleblower21 award 

In that instance, the whistleblower helped the Commission stop a multi-million 

dollar fraud The whistleblower provided documents and other significant 

information that allowed the investigation to move at an accelerated pace and 

prevent the fraud from ensnaring additional victims During Fiscal Year 2013, the 

Commission made three more payments to this whistleblower in connection with 

additional amounts that had been collected by the Commission in the underlying 

enforcement action 

On June 12, 2013, the Commission announced it had issued an award to three 

whistleblowers who helped the Commission shut down a sham hedge fund Two of 

the whistleblowers provided information that prompted the Commission to open 

the investigation and stop the scheme before more investors were harmed The 

third whistleblower provided independent corroborating information and identified 

key witnesses On August 30, 2013, the Commission announced it had approved 

payouts to each of the three whistleblowers in connection with money that had 

been collected in a related criminal proceeding 22

On October 1, 2013, the Commission announced it had made the largest 

whistleblower award to date, awarding over $14 million to a whistleblower whose 

information led to a Commission enforcement action that recovered substantial 

investor funds Less than six months after receiving the whistleblower’s tip, the 

Commission was able to bring an enforcement action against the perpetrators and 

secure investor funds 

On October 30, 2013, the Commission announced it made another award 

payment to a whistleblower whose information and continued cooperation enabled 

the Commission to detect and halt an ongoing fraudulent scheme Because the 

payment was made after the end of Fiscal Year 2013, this award payment is not 

reflected in the Fund or in the Commission’s financial statements for the 2013 fiscal 

year 

In sum, during Fiscal Year 2013, the Commission made $14,831,965 64 in award 

payments to whistleblowers under the Commission’s whistleblower program 

21By law, the Commission must protect the confidentiality of whistleblowers and cannot disclose any 

information that might directly or indirectly reveal a whistleblower’s identity Therefore, the information 

herein concerning the awards the Commission has issued does not include information regarding the 

whistleblower’s identity or other information that could indirectly reveal the whistleblower’s identity 

22In cases where there are related criminal proceedings in which money is collected by another regulator, a 

provision in the whistleblower rules allows whistleblowers to then additionally apply for an award based 

off the other regulator’s collections in what qualifies as a “related action ” 240 C F R § 21F-3(b) 
16 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

s e C u r i t i e s a n d e xC h a n g e C o M M i s s i o n 

investor ProteCtion fund

Section 922 of the Dodd-Frank Act established the Fund to provide funding for 

the Commission’s whistleblower award program, including the payment of awards 

in related actions 23 In addition, the Fund is used to finance the operations of the 

SEC’s OIG’s suggestion program 24 The suggestion program is intended for the 

receipt of suggestions from Commission employees for improvements in work 

efficiency, effectiveness, productivity, and the use of resources at the Commission, 

as well as allegations by Commission employees of waste, abuse, misconduct, or 

mismanagement within the Commission 25

Section 21F(g)(5) of the Exchange Act requires certain Fund information to be 

reported to Congress on an annual basis Below is a chart containing 

Fund-related information for Fiscal Year 201326:

FY 2013

Balance of Fund at beginning of fiscal 

year

$453,429,825.58

Amounts deposited into or credited to 

Fund during fiscal year

$0.0027

Amount of earnings on investments 

during fiscal year

$650,206.56

Amount paid from Fund during fiscal 

year to whistleblowers

($14,831,965.64)

Amount disbursed to Office of the 

Inspector General during fiscal year

($51,457.14)

Balance of Fund at end of the fiscal 

year

$439,196,609.36

In addition, Section 21F(g)(5) of the Exchange Act requires a complete set of 

audited financial statements for the Fund, including a balance sheet, income sheet, 

income statement, and cash flow analysis That information is included in the 

Commission’s Agency Financial Report, which is being submitted separately to 

Congress 

23Section 21F(g)(2)(A) of the Exchange Act, 15 U S C § 78u-6(g)(2)(A) 

24Section 21F(g)(2)(B) of the Exchange Act provides that the Fund shall be available to the Commission for 

“funding the activities of the Inspector General of the Commission under section 4(i) ” 15 U S C § 78u-6(g)(2)

(B) The Office of the General Counsel has interpreted Section 21F(g)(2)(B) to refer to Section 4D of the Exchange 

Act, which establishes the Inspector General’s suggestion program Subsection (e) of that section provides that 

the “activities of the Inspector General under this subsection shall be funded by the Securities and Exchange 

Commission Investor Protection Fund established under Section 21F ” 15 U S C § 78d-4(e) 

25Section 4D(a) of the Exchange Act, 15 U S C § 78d-4(a) 

26As referenced above, the financial information on the Fund contained in this report is unaudited, and Congress will

receive the audited financial information on the Fund when the Commission submits its 2013 Agency Financial 

Report 

27Pursuant to Section 21F(g)(3) of the Exchange Act, no monetary sanctions are deposited into or credited to the 

Fund if the balance of the Fund exceeds certain thresholds at the time the monetary sanctions are collected 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 17

e va l u at i o n o f t h e W h i s t l e b loW e r 

PrograM by the insPeCtor general

Section 922 of the Dodd-Frank Act mandated that OIG conduct a review of 

the Commission’s whistleblower program and submit a report of findings not 

later than 30 months after the Dodd-Frank Act’s enactment to the (1) Senate 

Committee on Banking, Housing and Urban Affairs, and (2) House Committee 

on Financial Services During Fiscal Year 2013, OWB worked closely with OIG in 

providing information and materials to enable OIG to perform its evaluation of the 

Commission’s whistleblower program On January 18, 2013, OIG issued its final 

report, a copy of which may be found on OWB’s webpage 28

OIG concluded that implementation of the final rules made the Commission’s 

whistleblower program clearly defined and user-friendly for those who have 

basic knowledge of securities laws, rules and regulations 29 OIG also found that 

the Commission’s whistleblower program is promoted on the Commission’s 

website, and that the public can easily access OWB’s homepage to learn about the 

whistleblower program and how to submit a tip 30 OIG determined that OWB’s 

outreach efforts have been strong and that “[b]ecause of the accessibility of OWB’s 

website from the SEC’s website, the program’s promotion through various social 

media methods, prominent presence on major internet search engines, and OWB’s 

internal and external outreach efforts the SEC’s whistleblower program is 

effectively promoted on its website and is widely publicized ”31

In its report, OIG concluded that OWB is generally prompt in responding to 

information that is provided by whistleblowers, applications for whistleblower 

awards, and in communicating with interested parties 32 However, OIG 

recommended that the whistleblower program’s internal controls be 

strengthened by adding performance metrics 33

Enforcement agreed that performance metrics related to OWB’s internal controls 

may be of value to the whistleblower process 34 As a result, OWB developed 

performance metrics in 28 key areas and added those metrics to its internal control 

plan For instance, on a quarterly basis, OWB will evaluate the percentage of 

whistleblower tips received by fax or through mail that are entered into the TCR 

System within three business days of receipt; the percentage of calls returned by 

OWB to messages left on the hotline within 24 business hours; and the percentage 

of initial reviews and acknowledgement or deficiency letters that are completed 

28Evaluation of the SEC’s Whistleblower Program, Office of Inspector General, January 18, 2013, 

Report No 511, available at http://www sec gov/about/offices/oig/reports/audits/2013/511 pdf 

29Id. at v 

30Id.

31Id. at 14 

32Id. at v, 14 

33Id. at v, 20-22 

34Id. at 42, Appendix VI 
18 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

within thirty business days of receipt of an application for a whistleblower award 

OWB also adopted additional performance measures that it will evaluate on an 

annual basis 

OWB’s adoption of these performance metrics related to its internal controls was 

designed to strengthen and enhance the Commission’s whistleblower program 

OWB began utilizing the newly-adopted performance metrics in the last quarter of 

Fiscal Year 2013 

Finally, OIG did not find any programmatic changes to the Commission’s 

whistleblower program to be necessary at this time For instance, OIG observed 

that the Commission’s whistleblower award levels are comparable to the 

award levels of other federal government whistleblower programs and that 

the whistleblower appeals process and funding mechanism via the Fund are 

appropriate 35 OIG also determined that it was premature to introduce a private 

right of action into the Commission’s whistleblower program and concluded that 

the Freedom of Information Act exemption added by the Dodd-Frank Act aids 

whistleblowers in disclosing information to the Commission 36

35Id. at vi, 24, 26 

36

Id. at vi, 30 
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 19

aPPendix a

W h i st l e b loW e r t i P s by a l l e g at i o n t y P e 

fisCal year 2013

250

200

150

100

50

0

QUARTE

QUARTE

Corporate Offering Manipulation Insider Trading and FCPA Unregistered Market Municipal Other* Blank

Disclosures Fraud Trading Pricing Offerings Event Securities

and Financials and Public

Pension

QUARTER 1

QUARTER 2

R 3

R 4

* “Other” indicates that the submitter has identified their WB TCR as not fitting into any allegation category that is listed on the online questionnaire.
20 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

aPPendix b

W h i st l e b loW e r t i P s by a l l e g at i o n t y P e 

CoMParison of fisCal years 2012 and 2013

800

2012

2013

700

600

500

400

300

200

100

764

703

557 553 547

525

465

457

196 190

168

149 144

131

115

105 100

89 85 84

0

64

48

Corporate Offering Manipulation Insider Trading and FCPA Unregistered Market Municipal Other* Blank

Disclosures Fraud Trading Pricing Offerings Event Securities

and Financials and Public

Pension

* “Other” indicates that the submitter has identified their WB TCR as not fitting into any allegation category that is listed on the online questionnaire.
dOdd-fRAnk WhiSTlEBlOWER PROgRAm | 21

aPPendix C

W h i st l e b loW e r t i P s r e C e i v e d by g e o g r a P h i C lo C at i o n 

united states and its territories

fisCal year 2013*

0 50 100 150 200 250 300 350 400

AK

AL

AR

AZ

CA

CO

CT

DC

DE

FL

GA

GU

HI

IA

ID

IL

IN

KS

KY

LA

MA

MD

ME

MI

MN

MO

MS

MT

NC

ND

NE

NH

NJ

NM

NV

NY

OH

OK

OR

PA

PR

RI

SC

SD

TN

TX

UT

VA

VI

VT

WA

WI

WV

WY

3

26

7

49

375

45

38

18

4

187

40

1

11

12

7

79

20

11

45

3

47

44

3

49

42

31

6

1

52

3

5

8

83

9

75

215

75

10

19

62

3

6

52

7

24

135

39

55

1

2

66

32

7

1

*Multiple individuals may jointly submit a TCR under the Commission’s whistleblower program. Appendix C reflects the number of individuals 

submitting WB TCRs to the Commission within the United States or one of its territories, and not the total number of domestic WB TCRs received 

by the Commission during Fiscal Year 2013. For example, a WB TCR that is jointly submitted by two individuals in New York and New Jersey would 

be reflected on Appendix C as a submission from both New York and New Jersey. The total number of persons submitting WB TCRs in the United 

States or one of its territories during Fiscal Year 2013 was 2250, which constitutes approximately 65.54% of the individuals participating in the 

Commission’s whistleblower program for this period. Additionally, 779 individuals constituting 22.69% of the total number of persons participating in 

the Commission’s whistleblower program for Fiscal Year 2013 submitted WB TCRs without any foreign or domestic geographical categorization or 

submitted them anonymously through counsel.
22 | U .S . SECURiTiES And ExChAngE COmmiSSiOn

aPPendix d

W h i st l e b loW e r t i P s r e C e i v e d by 

geograPhiC loCation international

fisCal year 2013*

Argentina 6

Australia 15

Austria 3

Belgium 1

Belize 1

Botswana 1

Brazil 4

Cameroon 1

Canada 62

Cayman Islands 1

China, People’s Republic of 52

Colombia 2

Costa Rica 1

Curacao 4

Cyprus 1

Czech Republic 1

Egypt 2

El Salvador 1

Finland 2

France 7

Germany 11

Ghana 5

Hong Kong 4

India 18

Indonesia 1

Ireland 18

Israel 4

Italy 8

Japan 3

Kenya 1

Lebanese Republic 1

Malaysia 1

Mexico 4

Montenegro 1

Netherlands, The 5

New Zealand 10

Norway 2

Pakistan 1

Panama 1

Portugal 3

Russia 20

Singapore 4

Slovenia 1

South Africa 5

South Korea 5

Spain 3

Sweden 4

Switzerland 8

Taiwan 2

Thailand 1

Turkey 8

Ukraine 2

United Arab Emirates 2

United Kingdom 66

0 10 20 30 40 50 60 70 80

Frequency

Vietnam 3

*As with domestic WB TCRs, multiple individuals from abroad may jointly submit a TCR under the Commission’s whistleblower program. 

Appendix D reflects the number of individuals submitting WB TCRs to the Commission from abroad, and not the total number of foreign 

WB TCRs received by the Commission during Fiscal Year 2013. The total number of persons submitting WB TCRs from abroad during Fiscal 

Year 2013 was 404, which constitutes approximately 11.77% of the individuals participating in the Commission’s whistleblower program for 

this period.

OFFICE OF THE WHISTLEBLOWER

Washington, DC