2016 ANNUAL REPORT TO CONGRESS ON THE

Dodd-Frank

Whistleblower Program

U.S. SECURITIES AND EXCHANGE COMMISSION
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.

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.

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.

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 . . . . . . . . . . . . . . . . .  

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

Activities of the Office of the Whistleblower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  

Claims for Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Whistleblower Awards Made in FY 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

Overview of Award Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

Profiles of Award Recipients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Preserving Employees’ Rights to Report to the Commission and 

Shielding Employees from Retaliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Restrictive Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

Anti-Retaliation Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Protection for Internal Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Whistleblower Tips Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Increase in Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Whistleblower Allegation Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Geographic Origin of Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Processing of Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

TCR Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Assistance by OWB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Securities and Exchange Commission Investor Protection Fund . . . . . . . . . . . . . 2

Appendix A. Whistleblower Tips by Allegation Type 

Comparison of Fiscal Years 2013–2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Appendix B. Whistleblower Tips Received by 

Geographic Location—United States and its Territories

FY 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Appendix C. Whistleblower Tips Received by 

Geographic Location International

FY 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Report available on the Web at: https://www.sec.gov/whistleblow

DODD-FRANK WHISTLEBLOWER PROGRAM | 1

“In the program’s 

short term of existence, 

the SEC already has 

awarded more than 

$111 million to 34 

whistleblowers...”

M E S S AG E F R O M T H E C H I E F O F T H E 

O F F I C E O F T H E W H I S T L E B LOW E R 

Fiscal Year (FY) 2016 was historic for the SEC’s whistleblower program. In August

2016, the SEC announced that its awards to whistleblowers since the beginning of 

the program have surpassed the $100 million mark. In the program’s short term of

existence, the SEC already has awarded more than $111 million to 34 whistleblowers 

whose information and cooperation assisted the agency in bringing multiple successful 

Commission enforcement actions and related actions

1

 The total award amount 

demonstrates the invaluable information and assistance whistleblowers have provided 

to the agency and underscores the program’s extraordinary impact on the agency’s 

enforcement initiatives

In FY 2016 alone, the agency issued awards totaling over $57 million—higher than 

all award amounts issued in previous years combined. The ten highest awards issued

by the SEC to whistleblowers have each totaled more than $1 million, with the largest 

exceeding more than $30 million. Six of the ten highest whistleblower awards were

made in FY 2016

The transformative effect the SEC’s whistleblower program has had on the agency’s 

enforcement program is further demonstrated by the hundreds of millions of dollars 

that have been returned to investors. The information and assistance provided by

the 34 whistleblowers who received awards under the program led to successful SEC 

enforcement actions in which over $584 million in financial sanctions was ordered, 

including more than $346 million in disgorgement of ill-gotten gains and interest. Not

only has the whistleblower program provided whistleblowers with protections and 

financial rewards, but it has also bolstered the agency’s enforcement efforts and aided 

harmed investors

We believe that awareness of the program has grown tremendously over the years, as 

we have continued to experience a consistent increase in the number of whistleblower 

tips received. In FY 2016, we received over 4,200 tips, which is a more than 40 percent

increase in whistleblower tips since FY 2012, the first year for which we have full-year 

data. We believe that the continued payment of significant awards, like those made this

past year, will continue to incentivize company insiders, market participants, and others 

with knowledge of potential securities law violations to come forward and report their 

information to the agency

FY 2016 witnessed significant and ground-breaking enforcement activity on the 

whistleblower protection front, with the agency bringing charges against a company 

1 Unless specifically stated otherwise in this report, the statistics contained herein are current through 

September 30, 2016, the end of Fiscal Year 2016
2 | U.S. SECURITIES AND EXCHANGE COMMISSI

“Strong enforcement 

of the anti-retaliation 

protections is a critical 

component of the 

SEC’s whistleblower

program.

”

for retaliating against an employee for reporting a possible securities law violation and 

charges against multiple companies for impeding their employees’ ability to report to 

the SEC through severance agreements and other practices

The Commission brought a first-of-its-kind enforcement action in September 2016, 

when it brought a stand-alone whistleblower retaliation case against casino-gaming 

company, International Game Technology (IGT). The company agreed to pay a halfmillion dollar penalty for firing an employee with several years of positive performance

reviews because the employee had reported to senior management and the SEC that the 

company’s financial statements might be distorted. As this case demonstrates, strong

enforcement of the anti-retaliation protections is a critical component of the SEC’s 

whistleblower program

In September 2016, the Commission filed an action against Anheuser-Busch InBev 

SA/NV, in which the company agreed to settle charges that it violated Exchange Act 

Rule 21F-17(a), among other violations, by entering into a separation agreement that 

stopped an employee from continuing to voluntarily communicate with the SEC due to 

a substantial financial penalty that would be imposed for violating strict non-disclosure 

terms. As this case demonstrates, companies simply cannot impede their employees’

ability to report wrongdoing to the agency through threats of financial punishment

In August 2016, the SEC also instituted proceedings against two companies for standalone violations of Rule 21F-17(a). An Atlanta-based buildings product distributor,

BlueLinx Holdings, Inc., settled charges that it violated the securities laws by using

severance agreements that required outgoing employees to waive their rights to 

monetary recovery in the event they filed a charge or complaint with the SEC or other 

federal agencies. The company agreed to pay a $265,000 penalty. In another cas

California-based health insurance provider, Health Net, Inc., agreed to pay a $340,000

penalty for illegally using severance agreements that required outgoing employees to 

waive their ability to obtain monetary awards from the SEC’s whistleblower program

As these cases demonstrate, companies cannot end-run the SEC’s whistleblower 

program by requiring employees to forego potential whistleblower awards as a 

condition to receiving their severance payments

Finally, in June 2016, Merrill Lynch agreed to pay $415 million and admit wrongdoing 

to settle charges that the firm violated the customer protection rule. Additionally, Merrill

Lynch settled charges for violating Rule 21F-17(a) by using language in severance 

agreements that operated to impede employees from voluntarily providing information 

to the SEC

Assessing confidentiality, severance, and other kinds of agreements that may stifle a 

would-be whistleblower from reporting his or her information to the agency and that 

strip away the very incentives Congress intended for the program will continue to be a 
DODD-FRANK WHISTLEBLOWER PROGRAM | 3

“We anticipate 

that the whistleblower 

program will continue 

to positively impact 

SEC enforcement 

of the federal 

securities laws...”

top priority for the SEC’s Office of the Whistleblower (OWB or the Office). Identifying

fact patterns of retaliation, such as that in the IGT case, will also continue to be a focus 

for OWB in the upcoming fiscal year to ensure that whistleblowers feel comfortable 

reporting wrongdoing without fear of repercussions

To help promote the agency’s whistleblower program and establish a line of 

communication with the public, OWB operates a whistleblower hotline where would-be 

whistleblowers, their attorneys, or other members of the public with questions about 

the program may call and leave a message. During FY 2016, we returned over 3,121

calls from members of the public, exceeding the number of calls returned last fiscal year

Since May 2011 when the hotline was established, OWB has returned over 15,413 calls 

to the public

We encourage those who believe they have information concerning a potential securities 

law violation to submit a tip via the online portal on OWB’s webpage (http://www.se

gov/whistleblower) or by submitting a Form TCR, also available on OWB’s webpage, 

by mail or fax. If individuals or their counsel have any questions about the program,

including questions about how or whether to submit a tip to the Commission, we 

encourage them to call OWB’s whistleblower hotline at (202) 551-4790

Because of the key features of the whistleblower program—protecting the confidentiality 

of individuals who report through the program, taking action against employers 

who retaliate against or interfere with their employees’ ability to report wrongdoing 

to the agency, and awarding whistleblowers whose information leads to successful 

enforcement actions—we expect that the Commission will continue to receive highquality tips that can be leveraged to detect and halt fraud earlier and more effectively

We anticipate that the whistleblower program will continue to positively impact SEC 

enforcement of the federal securities laws, as well as bolster the agency’s mission of 

protection of investors and the market

JANE NORBERG

Chief, Office of the Whistleblower

November 15, 2016
4 | U.S. SECURITIES AND EXCHANGE COMMISSI

HISTORY AND PURPOSE

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (DoddFrank Act or Dodd-Frank)2

 amended the Securities Exchange Act of 1934 (Exchange 

Act)3 by, among other things, adopting Section 21F,4 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 million and successful related actions

5

Awards are required to be made in an amount equal to 10 percent to 30 percent 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 are paid

The Commission established OWB, a separate office within the SEC’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 (Whistleblower Rules)6 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

7

In adopting its Whistleblower Rules, the Commission recognized that whistleblower 

reporting through internal compliance procedures can enhance the Commission’s 

enforcement efforts in appropriate circumstances

8

 For this reason, the Commission 

adopted strong incentives and protections for employees who choose to work within 

their company’s own compliance structure because they believe that the employer’s 

internal compliance function is an effective mechanism to address any potential 

wrongdoing

9

Dodd-Frank Section 924(d) requires OWB to report annually to Congress on 

OWB’s activities, whistleblower complaints received, 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:

2 Pub. L. No. 111-203, § 922(a), 124 Stat. 1841 (2

3 15 U.S.C. § 78a et 

4 Id. § 78u-

5 “Related actions” is defined at 17 C.F.R. §§ 240.2

6 17 C.F.R. §§ 240.21F-1 through 21

7 15 U.S.C. § 78u-6(h)(1); 17 C.F.R. § 240.2

8 Securities Whistleblower Incentives and Protections, 76 Fed. Reg. 34,300, 34,359 n.450 (June 13, 20

9 See id. §§ 21F-4(b)(7), (a)(4), (b)(3
DODD-FRANK WHISTLEBLOWER PROGRAM | 5

• The whistleblower award program, including a description of the number 

of awards granted and the types 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

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 FY 2016, 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 Fund and whistleblower incentive 

awards made during FY 2016 primarily address the requirements of 

Section 21F(g)(5) of the Exchange Act
6 | U.S. SECURITIES AND EXCHANGE COMMISSI

“OWB staff tracks 

investigations where 

a whistleblower has 

provided information 

or assistance to 

Enforcement.”

AC T I V I T I E S O F T H E O F F I C E O F T H E 

WHISTLEBLOWER

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. Jane Norberg, the Office’s first Deputy Chief, was named Chief

of OWB in September 2016. Ms. Norberg’s appointment followed the departure o

Sean X. McKessy, who left the Commission in July 2016 after presiding over the Office

for the past five years. In the past fiscal year, OWB also was staffed by eleven attorneys,

five paralegals, and an administrative assistant. Below is an overview of OWB’s primary

responsibilities and activities over the past fiscal year

Assessment of Award Applications

The whistleblower program was designed, in part, to provide a monetary incentive to 

corporate insiders and others with relevant information concerning potential securities 

violations to report their information to the Commission. As such, much of OWB’s

work relates to the assessment of claims for whistleblower awards

OWB posts a Notice of Covered Action (NoCA) on its website for every Commission 

enforcement action that results in monetary sanctions of over $1 million. Anyone who

believes that they are entitled to a whistleblower award may submit an application 

in response to a posted NoCA. Before submitting an application, however, a

whistleblower should check to make sure that there is a nexus between the 

whistleblower tip he or she provided to the Commission and what was ultimately 

charged in the enforcement matter

OWB staff tracks investigations where a whistleblower has provided information 

or assistance to Enforcement. This case-tracking initiative is intended to help OWB

know which cases may involve a potential award payout. Although it is ultimately a

whistleblower’s responsibility to make a timely application for an award, OWB may 

contact whistleblowers who have been actively working with Enforcement staff to 

confirm they are aware of the NoCA posting and applicable deadline for submitting a 

claim for award

After receiving an application for an award, OWB attorneys assess the application 

and the eligibility of the claimant and confer with relevant Enforcement or Office of 

Compliance, Inspections, and Exams staff to understand in more detail the contribution 

of the claimant, if any. OWB then makes recommendations to the Claims Review

Staff, currently comprised of five senior members of Enforcement, as to award 

eligibility. For a fuller explanation of how applications for awards are processed at the

Commission, as well as what awards were made during FY 2016, please refer to pages 

10-16 of this report
DODD-FRANK WHISTLEBLOWER PROGRAM | 7

“In FY 2016, the 

Commission brought 

charges against multiple 

companies for violating 

Rule 21F-17(a).”

Reviewing Restrictive Agreements 

During FY 2016, one area of focus for OWB was addressing whether employers were 

using confidentiality, severance, and other kinds of agreements, or engaging in other 

practices, to interfere with individuals’ ability to report potential wrongdoing 

to the SEC. Exchange Act Rule 21F-17(a) provides that “[n]o 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

In FY 2016, the Commission brought charges against multiple companies for violating 

Rule 21F-17(a). OWB continues to work closely with investigative staff to identify and

investigate practices in the use of confidentiality and other kinds of agreements, or other 

actions, that may violate Rule 21F-17(a). For more information about these activities,

please see pages 19-20

Advancing Anti-Retaliation Protections

OWB identifies and monitors whistleblower complaints alleging retaliation by 

employers or former employers in response to the employee’s reporting of possible 

securities law violations internally or to the Commission. The Commission has

authority to enforce all the provisions of the Exchange Act, including the anti-retaliation 

provisions of the Dodd-Frank Act. In FY 2016, the Commission brought its first

stand-alone whistleblower retaliation case since the Dodd-Frank Act authorized the 

agency to bring such charges. Bringing retaliation cases illustrates the high priority

placed on ensuring a safe environment for whistleblowers. OWB continues to work

with Enforcement staff on identifying cases where companies take reprisals for 

whistleblowing efforts and which may be appropriate for enforcement action

OWB also monitors federal court cases involving the anti-retaliation provisions of the 

Dodd-Frank Act and the Sarbanes-Oxley Act

11 Finally, OWB works with the SEC’s 

Office of General Counsel, which has filed amicus briefs and appeared in federal 

courts around the country in support of the Commission’s position that the antiretaliation provisions of the Dodd-Frank Act protect individuals who report internally 

to their companies as well as those who report directly to the Commission

12 For more 

information about these activities, please see pages 21-22

10 17 C.F.R. § 240.21F-1

11 18 U.S.C. § 15

12 The SEC’s interpretive guidance regarding internal reporting may be found on OWB’s webpage, 

http://www.sec.gov/about/offices/owb/owb-resources.shtml, and also has been published in the Feder

Register at 80 Fed. Reg. 47,829 (Aug. 10, 20
8 | U.S. SECURITIES AND EXCHANGE COMMISSI

“During FY 2016, 

the Office returned 

over 3,121 phone calls 

from members of 

the public.”

Intake of Whistleblower Tips

The Commission created an internal database called the Tips, Complaints, and Referrals 

Intake and Resolution System (TCR System) to serve as a central repository for all tips 

and complaints received by the Commission, as well as referrals from self-regulatory 

organizations and other government agencies. Exchange Act Rule 21F-9 provides

whistleblowers the option to submit tips either electronically through an online portal 

that feeds directly into the TCR System or by mailing or faxing a hard-copy Form TCR 

directed to OWB. This flexibility supports whistleblowers who may not have ready

access to a computer or who, for other reasons, may prefer to submit their information 

in hard copy. In cases where whistleblowers elect to submit a hard-copy Form TCR

OWB manually enters the tip into the TCR System so that it can be appropriately 

reviewed, assigned, and tracked in the same manner as tips received through the online 

portal. For more information on the number and types of tips received, please refer to

pages 23-26

Communications with Whistleblowers

OWB serves as the primary liaison between the Commission and individuals who 

have submitted information or are considering whether to submit information to 

the agency concerning a possible securities violation. OWB created a whistleblower

hotline, in operation since May 2011, to respond to questions from the public about the 

whistleblower program. Individuals leave messages on the hotline, which are returned

by OWB attorneys within 24 business hours. To protect the identity of whistleblowers,

OWB will not leave return messages unless the caller’s name is clearly and fully 

identified on the caller’s voicemail message. If OWB is unable to leave a message because

the individual’s name is not identified or if it appears to be a shared voicemail system, 

OWB attorneys make two additional attempts to contact the individual

During FY 2016, the Office returned over 3,121 phone calls from members of the 

public. Many of the calls OWB receives relate to how the caller should submit a tip

to be eligible for an award, how the Commission will maintain the confidentiality 

of a whistleblower’s identity, requests for information on the investigative process 

or tracking an individual’s complaint status, and whether the SEC is the appropriate 

agency to handle the caller’s tip

In addition to communicating with whistleblowers through the hotline, the Office 

regularly communicates with whistleblowers who have submitted tips, additional 

information, claims for awards, and other correspondence to OWB
DODD-FRANK WHISTLEBLOWER PROGRAM | 9

Public Outreach and Education 

One of the Office’s primary goals is to increase public awareness of the Commission’s 

whistleblower program. As part of that outreach effort, OWB has actively participated

in numerous webinars, media interviews, presentations, press releases, and other public 

communications. By raising awareness of the program, we hope to receive an even

greater number of high-quality tips that can assist the Commission in more quickly 

discovering and stopping fraudulent schemes and other securities laws violations. As

more individuals have become aware of the program, we have received more tips, as 

well as award claims

In FY 2016, OWB staff participated in many public engagements aimed at promoting 

and educating the public concerning the Commission’s whistleblower program. The

Office’s target audience generally includes potential whistleblowers, whistleblower 

counsel, and corporate compliance counsel and professionals. In an effort to increase

the visibility of the Commission’s whistleblower program, the Office has participated 

in legal panels and other forums with other federal agencies that have similar 

whistleblower programs, including a recent panel with staff from the Commodity 

Futures Trading Commission and the Internal Revenue Service

We also aim to promote and educate the public about our program through OWB’s 

website (www.sec.gov/whistleblower). The website contains detailed information abo

the program, copies of the forms required to submit a tip or claim an award, a listing 

of enforcement actions for which a claim for award may be made, links to helpful 

resources, and answers to frequently asked questions
10 | U.S. SECURITIES AND EXCHANGE COMMISSI

CLAIMS FOR AWARDS

Whistleblower Awards Made in FY 2016

In FY 2016, the Commission awarded more than $57 million to 13 whistleblowers, 

each of whom provided new information of which the agency was previously unaware 

that either led to the opening of the investigation or significantly contributed to the 

successful enforcement action. In total, the SEC has issued more than $111 million in

awards to 34 whistleblowers since the program’s establishment in August 2011

Below are the top ten highest awards made under the SEC’s whistleblower program, 

each exceeding $1 million

$3.5 million

$3 million

$2 million

$1.4 million to $1.6 million

$30 million

$22 million

$17 million

$14 million

$5 million to $6 million

$4 million

TOP 10 SEC WHISTLEBLOWER AWARDS

Since the program’s inception, the SEC has awarded 

$111 million to 34 whistleblowers.

September 2014

August 2016

June 2016

September 2013

May 2016

September 2016

May 2016

July 2015

March 2016

April 2015

As reflected in the graph, six of the ten largest whistleblower awards were made by 

the Commission during FY 2016. The more than $30 million award issued by the

Commission in September 2014 remains the highest award made to date under 

the program

13

13 See Order Determining Award Claim, Exchange Act Rel. No. 73174, File No. 2014-10 (Sept. 22, 2
DODD-FRANK WHISTLEBLOWER PROGRAM | 11

The following is an overview of SEC whistleblower awards during FY 2016

Second-Highest Award of Over $22 Million 

On August 30, 2016, the Commission authorized an award of more than 

$22 million to a company insider who provided information about a well-hidden 

securities violation that would have been unlikely to have been detected but for the 

whistleblower’s information

14 This was the second-highest award made under the 

SEC’s whistleblower program

Third-Highest Award of More Than $17 Million

On June 9, 2016, the Commission issued an award of more than $17 million to a 

former company employee whose detailed tip substantially advanced the agency’s 

investigation and ultimate enforcement action

15 The information and assistance 

provided by the whistleblower enabled the investigative staff to conserve time and 

resources and gather strong evidence supporting the Commission’s case. This was the

Commission’s third-highest whistleblower award

More Than $5 Million Award for Tip that Uncovered 

Difficult-to-Detect Securities Violations

On May 17, 2016, the Commission issued an award that is expected to yield a total 

payout between $5-6 million to a former company insider whose detailed tip led the 

agency to uncover securities violations that would have been nearly impossible for it 

to detect but for the whistleblower’s information

16

More Than $4 Million Award

On September 20, 2016, the Commission announced an award of more than $4 million 

to a whistleblower whose original information alerted the agency to a fraud

17 With this 

award, the SEC’s whistleblower awards in FY 2016 totaled more than $57 million—

exceeding the amount of all awards made in prior fiscal years combined

More Than $3.5 Million Award for Bolstering Ongoing Investigation

On May 13, 2016, the Commission announced an award of more than $3.5 million

to a company employee whose tip bolstered an ongoing investigation with additional 

evidence of wrongdoing that strengthened the SEC’s case

18 Whistleblowers can 

receive an award not only when their tip initiates an investigation, but also when 

they provide new information or documentation that significantly contributes to 

an existing investigation. This particular whistleblower’s tip substantially strengthened

the agency’s ongoing case and increased the SEC’s leverage during settlement 

negotiations with the company

14 See Order Determining Award Claim, Exchange Act Rel. No. 78719, File No. 2016-16 (Aug. 30, 201

SEC Press Rel. No. 2016-172,“$22 Million Whistleblower Award for Company Insider Who Helpe

Uncover Fraud.

15 See Order Determining Award Claim, Exchange Act Rel. No. 78025, File No. 2016-13 (June 9, 2016

SEC Press Rel. No. 2016-114, “SEC Issues $17 Million Whistleblower Awar

16 See Order Determining Award Claim, Exchange Act Rel. No. 77843, File No. 2016-10 (May 17, 2016

SEC Press Rel. No. 2016-91, “SEC Awards More Than $5 Million to Whistleblowe

17 See Order Determining Award Claim, Exchange Act Rel. No. 78881, File No. 2016-17 (Sept. 20, 201

SEC Press Rel. No. 2016-188, “SEC Issues $4 Million Whistleblower Awar

18 See Order Determining Award Claim, Exchange Act Rel. No. 77833, File No. 2016-9 (May 13, 2016); S

Press Rel. No. 2016-88, “Whistleblower Earns $3.5 Million Award for Bolstering Ongoing Investigati
12 | U.S. SECURITIES AND EXCHANGE COMMISSI

Nearly $2 Million Award to Three Whistleblowers

On March 8, 2016, the SEC awarded nearly $2 million to three whistleblowers

19 The 

largest of the three awards went to a whistleblower who voluntarily provided original 

information that prompted the agency to open the investigation. That whistleblower,

who received approximately $1.8 million, continued to provide valuable information

throughout the investigation. The other two whistleblowers jointly received payment of

over $130,000 for providing information after the investigation started. In determining

the appropriate award percentages, the SEC considered the relative contribution of each 

of the claimants to the successful enforcement action

Industry Expert Received More Than $700,000 for Detailed Analysis

On January 15, 2016, the SEC announced an award of more than $700,000 to a 

company outsider who conducted a detailed analysis that led to a successful SEC 

enforcement action

20 This award reflected the fact that the voluntary submission of 

high-quality analysis by industry experts can be just as valuable as first-hand knowledge 

of wrongdoing by company insiders

Two Whistleblowers Jointly Awarded More Than $450,000

On May 20, 2016, the SEC issued a joint award of more than $450,000 to two 

individuals for a tip that led the agency to open a corporate accounting investigation 

and for their assistance once the investigation was underway

21 These whistleblowers not 

only provided valuable tips that helped open the investigation, but they also provided 

valuable assistance as the investigation proceeded. The SEC’s whistleblower program

rewards those who continue to provide helpful and meaningful assistance throughout 

the process of bringing an enforcement action

SEC Whistleblower Award of More Than $325,000

On November 4, 2015, the Commission awarded a former employee of an investment 

firm $325,000 for providing specific and detailed information that caused staff to open 

the investigation

22 The whistleblower provided a detailed description of the misconduct 

and specifically identified individuals responsible for the wrongdoing. The whistleblower,

however, waited until after leaving the company to report the information to the SEC

Unreasonable reporting delay is a negative factor that may decrease an award 

percentage. The Commission found that the whistleblower’s delay, while limited in

duration, was unreasonable in light of the incentives and protections now afforded to 

whistleblowers under the Commission’s whistleblower program. Also of significance, the

great majority of the total disgorgement ordered in the underlying enforcement matter 

was attributable to the misconduct that occurred after the whistleblower learned about 

the misconduct and before reporting the information to the Commission, with a 

19 See Order Determining Award Claim, Exchange Act Rel. No. 77322, File No. 2016-4 (Mar. 8, 201

SEC Press Rel. No. 2016-41, “SEC Awarding Nearly $2 Million to Three Whistleblower

20 See Order Determining Award Claim, Exchange Act Rel. No. 76921, File No. 2016-2 (Jan. 15, 201

SEC Press Rel. No. 2016-10, “SEC Awards Whistleblower More Than $700,000 for Detailed Analysi

21 See Order Determining Award Claim, Exchange Act Rel. No. 77873, File No. 2016-11 (May 20, 2016

SEC Press Rel. No. 2016-94, “Two Individuals Share Whistleblower Award of More Than $450,00

22 See Order Determining Award Claim, Exchange Act Rel. No. 76338, File No. 2016-1 (Nov. 4, 201

SEC Press Rel. No. 2015-252, “SEC Announces Whistleblower Award of More Than $325,00
DODD-FRANK WHISTLEBLOWER PROGRAM | 13

resulting increase in the monetary sanctions upon which the whistleblower’s award was 

based. Delayed reporting is particularly problematic where the securities violations are

ongoing and the ill-gotten gains of the wrongdoing increase after the whistleblower has 

learned of the misconduct and yet delays reporting the activity internally, to another 

regulator, or to the Commission. Further, delayed reporting can potentially result in

wrongdoers squandering ill-gotten gains that belong to investors or other innocent 

third parties and may negatively impact the Commission’s ability to prosecute an 

enforcement action

Whistleblower’s Tip Leads to Successful Commission and 

Related Criminal Actions

On April 5, 2016, the Commission awarded a whistleblower more than $275,000 

in connection with a detailed tip that helped lead to the successful enforcement of a 

Commission action as well as a related criminal action

23 The amount of the award, 

however, was offset by monetary obligations unpaid from a final judgment entered 

against the whistleblower in another unrelated matter

Overview of Award Process 

Before a whistleblower receives payment of an award, there are a number of preconditions that must be met before an award may be issued or payment made. The

diagram below provides a snapshot of the overall process, from the filing of the 

whistleblower tip to payment of the whistleblower award. As reflected, the time

between the submission of a whistleblower tip and when an individual may receive an 

award payment can be several years, particularly where the underlying investigation is 

especially complex, where there are multiple, competing award claims, or where there 

are claims for related actions

23 See Order Determining Award Claim, Exchange Act Rel. No. 77530, File No. 2016-7 (Apr. 5, 2
14 | U.S. SECURITIES AND EXCHANGE COMMISSI

The following discussion focuses on the award claims process, from the posting of the 

NoCA to the issuance of a Final Order by the Commission

NoCA Posted 

The Office posts on its website a 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 million

24 During FY 2016, OWB posted 178 NoCAs

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

and sends email alerts to GovDelivery when the NoCA listing is updated

25 In addition, 

whistleblowers and other members of the public may sign up to receive an update via 

email every time the list of NoCAs on OWB’s website is updated. OWB typically posts

new NoCAs on its website at the end of each month

Award Claim Submitted

Once a NoCA is posted, individuals have 90 calendar days to apply for an award 

by submitting a completed Form WB-APP to OWB

26 Although OWB may make 

courtesy calls to those whistleblowers or their counsel whom we know have been 

actively working with Enforcement staff to inform them of the NoCA posting, it is 

the whistleblower’s responsibility to make a timely application for award. As such, we

encourage whistleblowers and their counsel to regularly review the monthly NoCA 

postings or to sign up to receive emails to alert them as to when new NoCAs are posted

Award Claim Reviewed

OWB attorneys evaluate each application for a whistleblower award, often tracking 

prior correspondence between the claimant and the Commission and analyzing 

intra-agency databases to understand the origin of the case and what tips or other 

correspondence the claimant may have submitted to the Commission. OWB works

closely with investigative staff responsible for the relevant action, as well as other 

Commission staff who may have interacted with the claimant, to understand the 

contribution or involvement the applicant may have had in the matter

Utilizing the information and materials provided by the claimant in support of 

the application, as well as other relevant materials, OWB prepares a written 

recommendation to the Claims Review Staff as to whether the applicant should receive 

an award, and if so, the percentage of the award

Preliminary Determination Issued

The Claims Review Staff, designated by the Director of Enforcement, considers OWB’s 

recommendation on the award application in accordance with the criteria set forth in 

the Dodd-Frank Act and the Whistleblower Rules. The Claims Review Staff currently is

composed of five senior officers in Enforcement, including the Director of Enforcement

24 OWB posts a NoCA for every enforcement action that results in monetary sanctions exceeding $1 million

By posting a NoCA for a particular case, the Commission is not making a determination either that a 

whistleblower tip, complaint or referral led to the Commission opening an investigation or filing an action 

with respect to the case or that an award to a whistleblower will be paid in connection with the case

25 GovDelivery is a vendor that provides communications for public-sector clients

26 17 C.F.R. §§ 240. 21F-10(a),
DODD-FRANK WHISTLEBLOWER PROGRAM | 15

“Award percentages 

are based on 

the particular facts 

and circumstances 

of each case, 

and are not based 

on any hard-set 

mathematical formula.”

The Claims Review Staff then issues a Preliminary Determination setting forth its 

assessment of whether the claim should be allowed or denied and, if allowed, setting 

forth the proposed award percentage amount

27

Award percentages are based on the particular facts and circumstances of each case, 

and are not based on any hard-set mathematical formula. However, the Whistleblower

Rules outline a number of positive and negative factors that the Commission and 

Claims Review Staff may consider in assessing an individual’s award percentage. Factors

that may increase an award percentage include the significance of the information 

provided by the whistleblower, the level of assistance provided by the whistleblower, the 

law enforcement interests at stake, and whether the whistleblower reported the violation 

internally through his or her firm’s internal reporting channels or mechanisms. Factors

that may decrease an award percentage include whether the whistleblower was culpable 

or involved in the underlying misconduct, interfered with internal compliance systems, 

or unreasonably delayed in reporting the violation to the Commission

Record and Reconsideration Requested

An applicant can submit a written request within 30 calendar days of the date of the 

Preliminary Determination asking for a copy of the record that formed the basis of the 

Claims Review Staff’s decision as to the applicant’s claim for award. As a precondition

to receiving a copy of the record, OWB requires claimants and their counsel, if 

represented, to execute a confidentiality agreement limiting the use of such materials to 

the claims review process

28 A claimant also has 30 calendar days to request a meeting 

with OWB, which OWB may grant at its discretion

Claimants can seek reconsideration of the Preliminary Determination by submitting 

a written response to OWB within 60 calendar days of the later of (i) the date of the 

Preliminary Determination, or (ii) if the record was requested, the date when OWB 

made the record available for a claimant’s review

29 If a claim is denied and the applicant 

does not object within the time period prescribed under the Whistleblower Rules, then 

the Preliminary Determination of the Claims Review Staff becomes the Final Order of 

the Commission

Final Order Issued

After considering any requests for reconsideration, the Claims Review Staff issues a 

Proposed Final Determination, and the matter is submitted to the Commission for 

its decision

30

All Preliminary Determinations of the Claims Review Staff that involve an 

award of money are submitted to the Commission for consideration as Proposed 

Final Determinations irrespective of whether the applicant objected to the 

Preliminary Determination

31

27 Id. § 21F-10(d

28 Rule 21F-12(b) states: “The Office of the Whistleblower may also require you to sign a confidentiality 

agreement, as set forth in § 240.21F-(8)(b)(4) of this chapter, before providing [Preliminary Determination]

materials.

29 17 C.F.R. § 240.21F-1

30 Id. §§ 21F-10(g), (h

31 Id. §§ 21F-10(f), (h
16 | U.S. SECURITIES AND EXCHANGE COMMISSI

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

Claimants who are issued a denial have a right to appeal the Commission’s Final Order 

within 30 days of issuance to the United States Court of Appeals for the District of 

Columbia Circuit, or to the circuit where the aggrieved person resides or has his or her 

principal place of business

32

Final Orders of the Commission are made publicly-available on the Commission’s and 

OWB’s website. The public Final Orders are redacted to protect the confidentiality of

the award applicant

There are a number of factors that may affect the length of time it takes for OWB to 

review an award claim and for the Commission to issue a Final Order. Our Office

works closely with Enforcement investigative staff, staff of the Commission’s Office 

of General Counsel, and other Commission divisions and offices, as appropriate, to 

conduct a thorough analysis of each claim for award that the Commission receives

These efforts are designed to provide each claimant with a fair review and to promote 

Commission award determinations that are sound both factually and legally. Therefore,

the number of claimants applying for an award in connection with a covered action 

affects the time it takes to process a claim. In connection with one NoCA, for example,

OWB received sixteen claims for award. The presence of novel issues, or the need

to supplement the record with additional information from the claimant, may also 

lengthen the time it takes to process a claim. There may also be a delay when there is

a related action, requiring OWB to coordinate with or receive assistance from another 

regulator to understand what contribution the whistleblower may have made in the 

related action

32 Id. § 21F-10(h). A whistleblower’s rights of appeal from a Commission Final Order are set forth i

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

17 C.F.R. § 240.21F-1
DODD-FRANK WHISTLEBLOWER PROGRAM | 17

“Protecting 

whistleblower 

confidentiality is 

an integral 

component of 

the whistleblower 

program.

”

P R O F I L E S O F AWA R D R E C I P I E N T S 

The Dodd-Frank Act prohibits the Commission and its staff from disclosing any 

information that reasonably could be expected to reveal the identity of a whistleblower, 

subject to certain exceptions. Protecting whistleblower confidentiality is an integral

component of the whistleblower program. For this reason, information that may tend

to reveal a whistleblower’s identity is redacted from Commission orders granting or 

denying awards before they are issued publicly. This may include redacting the name o

the enforcement action upon which the award is based

Consistent with our practice of maintaining whistleblower confidentiality as provided 

for by the Dodd-Frank Act—but in an effort to provide more transparency—this section 

provides certain information on an aggregate basis regarding whistleblowers who 

have received awards under the program, while still protecting the identity of any 

particular individual

Since the beginning of the whistleblower program, the Commission has issued awards 

to 34 individuals in connection with 26 covered actions, as well as in connection with 

several related actions. There are commonalities among many of the tips or complaints

that were submitted by these successful whistleblowers. The information provided

by each award recipient was specific, in that the whistleblower identified particular 

individuals involved in the fraud, or provided specific documents that substantiated their 

allegations or explained where such documents could be located. In some instances,

the whistleblower identified specific financial transactions that evidenced the fraud, or 

provided detailed assessment of the wrongdoing. The misconduct was relatively recent

or ongoing at the time it was reported to the Commission

An individual may be eligible to receive an award where his or her information leads 

to a successful enforcement action, meaning generally that the original information 

either caused an examination or investigation to open or the original information 

significantly contributed to a successful enforcement action where the matter was 

already under examination or investigation. Almost 60 percent of the whistleblowers

who have received awards under the program provided original information that 

caused Enforcement staff to open an investigation, while the remaining 40 percent 

received awards because their original information significantly contributed to an 

existing investigation. In assessing whether information significantly contributed to

an enforcement action, the Commission will consider such factors as whether the 

information allowed the agency to bring the action in significantly less time or with 

fewer resources, and whether it supported additional successful charges, or successful 

claims against additional individuals or entities

33

33 Securities Whistleblower Incentives and Protections, 76 Fed. Reg. 34,300, 34,325 (June 13, 201
18 | U.S. SECURITIES AND EXCHANGE COMMISSI

“Almost 65 percent 

of the award 

recipients were 

insiders of the entity 

on which they 

reported information 

of wrongdoing to 

the SEC.”

There is no requirement under the Whistleblower Rules that an individual be an 

employee or other insider to be eligible for an award. However, to date, almost

65 percent of the award recipients were insiders of the entity on which they reported 

information of wrongdoing to the SEC. This percentage has grown. Last year, w

reported that approximately half of the award winners were insiders. Of the award

recipients who were current or former employees of the entity, approximately 80 

percent raised their concerns internally to their supervisors or compliance personnel, 

or understood that their supervisor or relevant compliance personnel knew of the 

violations, before reporting their information of wrongdoing to the Commission

Individuals may obtain information of possible wrongdoing through other channels

The remaining award recipients obtained their information because they were either 

investors who had been victims of the fraud, professionals working in the same or 

related industry, or individuals who had a personal relationship with the wrongdoer

Whistleblowers are not required to be represented by counsel unless they choose to 

file their tips with the Commission anonymously. Approximately half of the awar

recipients were represented by counsel when they initially submitted their tips to the 

agency. Certain of the individuals who were not represented by counsel at the tim

they submitted their tip subsequently retained counsel during the course of the 

investigation or during the whistleblower award application process (although 

retaining counsel is not required to file for a whistleblower award). Almost one

quarter of the award recipients submitted their information anonymously to the 

Commission through counsel

Several of the cases in which a whistleblower received an award concerned firms 

involved in the financial services industry, with some involving broker-dealers or 

investment advisers. A number of the award recipients reported information to the

Commission concerning suspected Ponzi-like schemes. Other award recipients provided

tips to the Commission relating to false or misleading statements in a company’s 

offering memoranda or marketing materials, false pricing information, accounting 

irregularities, and internal controls violations, among other types of misconduct

Under the Whistleblower Rules, individuals are permitted to jointly submit a tip to the 

Commission. Five of the cases in which an award payment was made involved two or

more whistleblowers jointly submitting information and materials to the Commission

Individuals who provide information that leads to successful SEC actions resulting in 

monetary sanctions over $1 million also may be eligible to receive an award if the same 

information led to a related action, such as a parallel criminal prosecution. Six of the

award recipients have received payments based, in part, on collections made in related 

criminal actions

The award recipients hail from several different parts of the United States and eight of 

the award recipients were foreign nationals at the time they submitted their tips to the 

Commission, including the recipient of the program’s highest award to date
DODD-FRANK WHISTLEBLOWER PROGRAM | 19

“In FY 2016, 

the Commission 

advanced its 

enforcement efforts 

in this area, bringing 

additional significant 

actions aimed at 

protecting the rights 

of whistleblowers 

to report freely to 

the agency.” 

P R E S E R V I N G E M P LOY E E S ’ R I G H T S T O 

R E P O R T T O T H E C O M M I S S I O N A N D S H I E L D I N G 

EMPLOYEES FROM RETALIATION

As noted above, protecting whistleblowers’ rights to report possible securities law 

violations to the Commission, and protecting whistleblowers from retaliation, 

was a focus for OWB in FY 2016 and will continue to be a priority in the coming 

fiscal year

Restrictive Agreements

Exchange Act Rule 21F-17(a) provides that “[n]o 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

In the previous fiscal year, the Commission brought its first enforcement action against 

a company for its use of confidentiality agreements that impeded whistleblowers in 

violation of Rule 21F-17(a)

35 In FY 2016, the Commission advanced its enforcement 

efforts in this area, bringing additional significant actions aimed at protecting the rights 

of whistleblowers to report freely to the agency

On June 23, 2016, in connection with the SEC’s administrative settlement with Merrill 

Lynch for violations of the customer protection rule, the Commission also charged 

Merrill Lynch with violating Rule 21F-17(a) by using language in severance agreements 

that operated to impede employees from voluntarily providing information to the 

SEC

36 For example, after the adoption of Rule 21F-17, the company used language 

in a severance agreement with departing employees based on a standard template that 

prohibited them from disclosing any aspect of the company’s confidential information 

or trade secrets to any outside person or entity except pursuant to formal legal processes 

or unless the former employee first obtained the written approval of an authorized 

company representative. Further, in 2014, the company added a clause to its form

severance agreement advising departing employees that the severance agreement did not 

prohibit initiating communications directly with the Commission or other authorities, 

but limiting the types of information that could be conveyed to information relating to 

the severance agreement itself or “its underlying facts and circumstances.” In accepting

the settlement, the Commission considered Merrill Lynch’s remedial acts, including 

revising the language in its form severance agreements so that information beyond 

the underlying facts and circumstances of those agreements can be conveyed to the 

Commission and other regulatory authorities. The updated language states that, subject

to applicable privileges, nothing in the agreements prohibits employees from voluntarily 

communicating with the SEC regarding suspected violations of law. Merrill Lynch also

now provides employees with notice of their whistleblower rights as part of mandatory 

annual training

34 17 C.F.R. § 240.21F-1

35 In the Matter of KBR, Inc., Rel. No. 74619, File No. 3-16466 (Apr. 1, 2

36 In the Matter of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional 

Clearing Corp., Rel. No. 78141, File No. 3-17312 (June 23, 20
20 | U.S. SECURITIES AND EXCHANGE COMMISSI

On August 10, 2016, the Commission instituted proceedings against BlueLinx Holdings, 

Inc. for violating Rule 21F-17(a). BlueLinx, an Atlanta-based building product

distributor, used severance agreements that required outgoing employees to waive their 

rights to monetary recovery should they file a complaint with the SEC or other federal 

agency

37 BlueLinx added the monetary recovery prohibition to all of its severance 

agreements in mid-2013, nearly two years after the SEC’s adoption of Rule 21F-17(a)

BlueLinx agreed to pay a $265,000 civil penalty and to amend its severance agreements 

to make clear that employees may report possible securities violations to the SEC without 

the company’s prior approval and without having to forfeit any resulting whistleblower 

award. BlueLinx also agreed to make reasonable efforts to contact former employees

who had executed severance agreements after August 12, 2011, to notify them that 

BlueLinx does not prohibit former employees from providing information to the SEC or 

from accepting SEC whistleblower awards

On August 16, 2016, the Commission instituted another stand-alone action for 

violating Rule 21F-17(a). Health Net, Inc., a California-based health insurance provider

unlawfully used severance agreements that required outgoing employees to waive their 

ability to obtain monetary awards from the SEC’s whistleblower program as a condition 

of receiving severance payments and other consideration from the company

38 Health 

Net added the provision in August 2011 after the SEC adopted Rule 21F-17(a). Health

Net removed the SEC-specific language from its severance agreements in June 2013, but 

nonetheless retained restrictive language that required an employee to waive any right to 

individual monetary recovery in any proceeding brought based on any communication 

by the employee with any federal, state or local government agency or department

Health Net amended the agreements to strike all such restrictive language in 2015

Health Net agreed to pay a $340,000 civil penalty and to contact former employees who 

had signed the severance agreements to inform them that they are not prohibited from 

seeking and obtaining a whistleblower award from the Commission

Finally, on September 28, 2016, the Commission instituted proceedings against 

Anheuser-Busch InBev SA/NV (ABI InBev) for violations of Rule 21F-17(a), as well 

as violations of the books and records and internal controls provisions of the Foreign 

Corrupt Practices Act

39 The company entered into a separation agreement, including 

strict confidentiality provisions, with an employee who had reported internally concerns 

about improper payments to government officials. After signing the agreement, the

employee, who had also been communicating with the Commission, stopped doing so 

because he believed the separation agreement prohibited such communications and that 

he could risk being liable to the company under the agreement for liquidated damages

Prior to the Commission’s Order, AB InBev amended its separation agreements for 

departing employees of its United States entities to make clear that they do not prohibit 

the employees from reporting possible violations of law to governmental agencies

Further, as part of the settlement, ABI InBev agreed to make reasonable efforts to 

contact former employees of AB InBev’s United States entities previously identified by 

the Commission staff, and provide them with a copy of the Commission’s Order and 

a statement that ABI InBev does not prohibit former employees from contacting the 

Commission regarding possible violations of federal law or regulation

37 In the Matter of BlueLinx Holdings, Inc., Rel. No. 78528, File No. 3-17371 (Aug. 10, 2

38 In the Matter of Health Net, Inc., Rel. No. 78590, File No. 3-17396 (Aug. 16, 2

39 In the Matter of Anheuser-Busch InBev SA/NV, Rel. No. 78957, File No. 3-17586 (Sept. 28, 2
DODD-FRANK WHISTLEBLOWER PROGRAM | 21

“On September 29, 

2016, the Commission 

brought its first 

stand-alone retaliation 

case under Section 

21F(h)(1) of the 

Exchange Act.”

Anti-Retaliation Enforcement

Section 21F(h)(1) of the Exchange Act, promulgated by Section 922 of the

Dodd-Frank Act, prohibits employers from retaliating against whistleblowers in 

the terms and conditions of their employment because of their whistleblowing 

activities. Individuals who have experienced such retaliation may pursue a private

cause of action in the federal courts. In addition, Rule 21F-2(b)(2) under the

Exchange Act states that Section 21F(h)(1) is enforceable in an action or proceeding 

brought by the Commission

40 This rule reflects the fact that the Commission has 

general enforcement authority over any violation of the Exchange Act

On September 29, 2016, the Commission brought its first stand-alone retaliation 

case under Section 21F(h)(1) of the Exchange Act

41 The whistleblower, a director 

of a division of casino gaming company International Game Technology (IGT), had 

received positive performance evaluations throughout his tenure with the company, 

including his mid-year review in 2014. Shortly after the whistleblower received a

favorable 2014 mid-year review, the whistleblower raised concerns to senior managers, 

to the company’s internal complaint hotline, and to the SEC, that IGT’s publiclyreported financials may have been distorted. The whistleblower became concerned that

the company’s cost accounting model could result in inaccuracies in IGT’s financial 

statements, and reported these concerns to management and the SEC. Within weeks of

raising the concerns, the whistleblower was slated for termination and removed from 

significant work assignments. The company conducted an internal investigation into the

whistleblower’s allegations and determined that its reported financial statements were 

not inaccurate. Shortly thereafter, IGT fired the whistleblower. The Commission fou

that IGT’s conduct violated Section 21F(h), and IGT agreed to pay a $500,000 civil 

penalty to settle the charges

The SEC previously brought another retaliation enforcement action in June 2014, 

charging hedge fund advisory firm Paradigm Capital Management, Inc. with retaliating

against its head trader for reporting prohibited principal transactions to the SEC

42

The Commission ordered the firm to pay $2.2 million to settle the retaliation and

other charges

Protection for Internal Reporting

When the Commission issued the Whistleblower Rules in 2011, it clarified that the 

Dodd-Frank employment retaliation protections apply not only when individuals report 

potential securities law violations directly to the SEC but also when they, among other 

things, report internally within public companies

43 In August 2015, the Commission 

released interpretive guidance clarifying the interaction of the anti-retaliation provisions 

and the award provisions of the Whistleblower Rules with respect to the protection of 

internal reporting under Dodd-Frank. As explained in the interpretive guidance

40 240 C.F.R. § 21F-2(b)

41 In the Matter of International Game Technology, Rel. No. 78991, File No. 3-17596 (Sept. 29, 2

42 In the Matter of Paradigm Capital Management, Inc. and Candace King Weir, Rel. No. 72393, File 

3-15930 (June 16, 2014)

43 17 C.F.R. § 240.21F-2(b)(1). The anti-retaliation protections apply whether or not the individual satis

the requirements to qualify for an award. Id. § 240.21F-2(b)(1)(
22 | U.S. SECURITIES AND EXCHANGE COMMISSI

individuals can report possible securities law violations internally, through their 

companies’ respective reporting structures, and still be protected if they then 

suffer adverse employment consequences—even if they have not reported such 

information to the SEC in the manner required to qualify for an award under 

the Whistleblower Rules

44

There is a divide among the federal Courts of Appeals on whether the Dodd-Frank 

anti-retaliation provisions extend to individuals who report potential violations of 

the securities laws internally without also reporting directly to the Commission. In

Asadi v. G.E. Energy (USA), LLC, the U.S. Court of Appeals for the Fifth Circui

interpreted Dodd-Frank as limiting employment retaliation protection only to those 

individuals who report securities law violations directly to the Commission

45 By 

contrast, in Berman v. Neo@Ogilvy LLC, the U.S. Court of Appeals for the Secon

Circuit held that the pertinent provisions of the Dodd-Frank Act were sufficiently 

ambiguous to warrant the court’s deference to the SEC’s rule that the statute’s retaliation 

protections apply to employees who report securities law violations to their employers, 

regardless of whether they also report to the Commission

46 The Second Circuit 

acknowledged that its decision created a circuit split because of the Fifth Circuit’s 

contrary decision in Asadi. The Second Circuit also noted the significant existing

disagreement among a large number of district courts on the issue, the majority of 

which have deferred to the SEC’s rule

During FY 2016, as in the prior fiscal year, the Commission filed several amicus curiae

briefs in private retaliation lawsuits to urge district courts and appellate courts to 

defer to the SEC’s rule and hold that individuals are entitled to employment retaliation 

protection if they report information of a possible securities violation internally at 

a publicly-traded company, regardless of whether they have separately reported the 

information to the SEC

47 As the SEC has explained in these amicus filings, ensuring that 

employees are protected from employment retaliation whenever they report possible 

securities law violations, whether internally or to the SEC, is critical to the SEC’s 

enforcement efforts. Put simply, if individuals are not assured that they will be protected

from retaliation when they report internally, they will be less likely to report internally, 

which could undermine the important role that internal compliance programs play in 

helping the Commission prevent, detect, and stop securities law violations

44 The SEC’s interpretive guidance may be found on OWB’s webpage, http://www.sec.gov/about/office

owb/owb-resources.shtml, and also has been published in the Federal Register at 80 Fed. Reg. 47,8

(Aug. 10, 2015

45 720 F.3d 620 (5th Cir. 201

46 801 F.3d 145 (2d Cir. 201

47 See, e.g., Somers v. Digital Realty Trust Inc., No. 15-17352 (9th Cir., amicus filed May 25, 2016)

Verble v. Morgan Stanley Smith Barney LLC, et al., No. 15-6397 (6th Cir., amicus filed Feb. 4, 2016

Gordon Stroh v. Saturna Capital Corp., 16-cv-00283-TSZ (W.D. Wash., amicus filed May 20, 2016

David Danon v. The Vanguard Group, Inc., 15-cv-6864 (E.D. Pa., amicus filed Mar. 30, 2016); see a

amicus briefs filed in FY 2015, Beacom v. Oracle Am., Inc., 825 F.3d 376 (8th Cir. 2016)(amicus brie

filed before appellate decision); Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015) (same); Safaria

v. Am. DG Energy, Inc., 2015 WL 4430837 (3d Cir. July 21, 2015) (same); Liu Meng-Lin v. Siemens

AG, 763 F.3d 175 (2d Cir. 2014) (same); Sandford Wadler v. Bio-rad Laboratories, Inc., 141 F. Supp.

1005 (N.D. Cal. 2015) (amicus filed before district court decision); Davies v. Broadcom Corp., 2015 

5545513 (C.D. Cal. Sept. 8, 2015) (same); Wiggins v. ING U.S., Inc., 2015 WL 3771646 (D. Conn.

17, 2015) (same)
DODD-FRANK WHISTLEBLOWER PROGRAM | 23

“The number 

of whistleblower 

tips received by 

the Commission 

has grown more 

than 40 percent.”

W H I S T L E B LOW E R T I P S R E C E I V E D 

The Whistleblower Rules specify that individuals who would like to be part of the 

whistleblower program must submit their tip via the Commission’s online portal or by 

mailing or faxing their tip on Form TCR to OWB

48 Whistleblowers who use the online 

portal to submit a complaint receive a computer-generated confirmation of receipt with 

a TCR submission number. For those who submit a hard-copy Form TCR by mail o

fax, OWB sends an acknowledgement letter, which includes a TCR submission number, 

or a deficiency letter explaining that the TCR was not properly submitted under the 

Whistleblower Rules. All whistleblower tips related to potential securities law violations

received by the Commission are entered into the TCR System and are evaluated by the 

Commission’s Office of Market Intelligence within the Division of Enforcement

Increase in Whistleblower Tips

For each fiscal year that the whistleblower program has been in operation, the 

Commission has received an increasing number of whistleblower tips. Since August

2011, the Commission has received a total of 18,334 whistleblower tips, and in 

FY 2016 alone, received more than 4,200 tips. The table below shows the number

of whistleblower tips received by the Commission on a yearly basis since the inception 

of the whistleblower program:49

FY201150 FY2012 FY2013 FY2014 FY2015 FY2016

334 3,001 3,238 3,620 3,923 4,21851

As reflected in the table, from FY 2012, the first year for which we have full-year data, 

to FY 2016, the number of whistleblower tips received by the Commission has grown 

more than 40 percent

48 17 C.F.R. § 240.21F-

49 The 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

50 Because the Whistleblower Rules became effective August 12, 2011, only 7 weeks of whistleblower data is 

available for FY 2011

51 During FY 2016, the Commission received an unusually high number of whistleblower tips from the same 

individual. This number excludes tips received from this individua
24 | U.S. SECURITIES AND EXCHANGE COMMISSI

Whistleblower Allegation Type

Whether submitting their tips on Form TCR or through the online portal, 

whistleblowers are asked to identify the nature of their complaint allegations

For FY 2016, the most common complaint categories reported by whistleblowers 

were Corporate Disclosures and Financials (22 percent), Offering Fraud (15 percent), 

and Manipulation (11 percent)

52

The following graph reflects the number of whistleblower tips received in FY 2016 

by allegation type:53

52 This breakdown reflects the categories selected by whistleblowers and, thus, the data represents the 

whistleblower’s own characterization of the violation type

53 The category of “Other” indicates that the submitter identified the whistleblower TCR as not fitting into 

any allegation category that is listed on the questionnaire
DODD-FRANK WHISTLEBLOWER PROGRAM | 25

The type of securities violations reported by whistleblowers has remained generally 

consistent over the last five years. Since the beginning of the program, Corporate

Disclosures and Financials, Offering Fraud, and Manipulation have consistently ranked 

as the three highest allegation types reported by whistleblowers. Appendix A to this

report provides a comparison among the number of whistleblower tips by allegation 

type that the Commission received during Fiscal Years 2013 through 2016

Geographic Origin of Whistleblower Tips

Through OWB’s extensive outreach efforts to publicize and promote the Commission’s 

whistleblower program, the Commission continues to receive whistleblower 

submissions from individuals throughout the United States, as well as internationally

During FY 2016, California, New York, Florida, Ohio, and Texas yielded the highest 

number of whistleblower tips

FREQUENCY

0–20

21–40

41–60

61–100

>101
26 | U.S. SECURITIES AND EXCHANGE COMMISSI

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

whistleblower tips from individuals in 103 countries outside the United States. In

FY 2016 alone, the Commission received whistleblower submissions from individuals 

in 67 foreign countries. After the United States, OWB received the highest number of

whistleblower tips in FY 2016 from individuals in Canada, the United Kingdom, and 

Australia. The map below reflects all countries in which whistleblower tips originated

during FY 2016

Appendices B and C to this report provide detailed information concerning the sources 

of domestic and foreign whistleblower tips that the Commission received during 

FY 2016
DODD-FRANK WHISTLEBLOWER PROGRAM | 27

“In general, the 

more specific, 

credible, and timely 

a whistleblower tip, 

the more likely it 

is that the tip will 

be forwarded to 

investigative staff 

for further follow-up 

or investigation.”

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 

The Office of Market Intelligence (OMI), within the Commission’s Division of 

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

timely TCRs to members of the 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 with high-quality 

information that warrant the additional allocation of Commission resources. When

OMI determines that a complaint warrants deeper investigation, OMI staff assigns 

the complaint to one of the Commission’s eleven regional offices, a specialty unit, or 

to an Enforcement group in the Home Office. Complaints that relate to an existing

investigation are forwarded to the staff working on the matter. Generally, when the

evaluation of a tip could benefit from the specific expertise of another Division or 

Office within the SEC, the tip is 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. Even if the 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 significantly contributes to an 

ongoing or active investigation. Tips also may prompt the Commission to commence

an examination of a regulated entity, which may lead to an enforcement action

As noted previously, OWB actively tracks whistleblower tips that are referred to 

Enforcement staff for investigation or follow-up. OWB currently is tracking over

800 matters in which a whistleblower’s tip has caused a Matter Under Inquiry or 

investigation to be opened or which have been forwarded to Enforcement staff for 

review and consideration in connection with an ongoing investigation. However, not

all of these matters will result in an enforcement action, or an enforcement action 

where the required threshold of over $1 million in monetary sanctions will be ordered

In general, the more specific, credible, and timely a whistleblower tip, the more 

likely it is that the tip will be forwarded to investigative staff for further follow-up 

or investigation. For instance, if the tip identifies individuals involved in the scheme,

provides examples of particular fraudulent transactions, or points to non-public 

materials evidencing the fraud, the tip is more likely to be assigned to Enforcement 

staff for investigation. Tips that make blanket assertions or general inferences based

on market events, or which do not relate to the federal securities laws are less likely 

to be sent to or pursued by Enforcement staff

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 thi

occurs, OMI refers the tip to the other agency in accordance with the Exchange Act’s 

whistleblower confidentiality requirements
28 | U.S. SECURITIES AND EXCHANGE COMMISSI

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

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 by mail or fax, OWB 

enters the information into the TCR System so it can be evaluated by OMI

54 During 

the evaluation process, OWB may assist by contacting the whistleblower to obtain 

additional information to help in the triage process

After submitting an initial tip, a whistleblower is free to, and often does, submit 

additional information or materials to buttress the allegations. Additional information

should be sent to OWB in hard-copy by mail or fax and should include the original 

TCR submission number. OWB then uploads the additional information into the TCR

System and sends an acknowledgement letter to the whistleblower confirming receipt of 

the information or materials

54 Tips submitted by whistleblowers through the Commission’s online portal are automatically forwarded to 

OMI for evaluation
DODD-FRANK WHISTLEBLOWER PROGRAM | 29

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

55 Also, the Fund is used to finance the operations of the suggestion 

program of the SEC’s Office of Inspector General

56 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, and is operated outside of OWB

57

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 FY 2016

 FY 2016

Balance of Fund at beginning of fiscal year $ 400,693,089.56

Amounts deposited into or credited to Fund during fiscal year $ 0.0057

Amount of earnings on investments during fiscal year $ 2,412,788.41

Amount paid from Fund during fiscal year to whistleblowers $ (34,945,648.43)

Amount disbursed to Office of the Inspector General during 

fiscal year

$ (44,222.10)

Balance of Fund at end of the fiscal year $ 368,116,007.44

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 will be included in the

Commission’s Agency Financial Report, which will be separately submitted to Congress

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

56 Section 21F(g)(2)(B) of the Exchange Act, 15 U.S.C. § 78u-6(g)(2)(B), provides that the Fund shall 

available to the Commission for “funding the activities of the Inspector General of the Commission under 

section 4(i).” The Commission’s Office of General Counsel has interpreted this section to refer to Exchange

Act Section 4D, which established the Inspector General’s suggestion program. 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.” Id. § 78d-4(

57 Section 4D(a) of the Exchange Act, id. § 78d-4(a

57 Pursuant 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. Id. § 78u-6(g)(

DODD-FRANK WHISTLEBLOWER PROGRAM | 31

* “Other” indicates that the submitter has identified their WB TCR as not fitting into any allegation category that is listed on the questionnaire.

APPENDIX A

W H I S T L E B LOW E R T I P S B Y A L L E G AT I O N T Y P E 

COMPARISON OF FISCAL YEARS 2013–2016
32 | U.S. SECURITIES AND EXCHANGE COMMISSI

APPENDIX B

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

FY 2016*

*Multiple individuals may jointly submit a TCR under the Commission’s whistleblower program. Appendix B 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 FY 2016. For example, a WB TCR that is jointly submitted by two individuals in New York and New Jersey would be reflected on Appendix B 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 FY 

2016 was 3,087, which constitutes approximately 70 percent of the individuals participating in the Commission’s whistleblower program for this period. 

Additionally, 902 individuals constituting approximately 20 percent of the total number of persons participating in the Commission’s whistleblower 

program for FY 2016 submitted WB TCRs without any foreign or domestic geographical categorization or submitted them anonymously through counsel.
DODD-FRANK WHISTLEBLOWER PROGRAM | 33

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 

GEOGRAPHIC LOCATION INTERNATIONAL

FY 2016*

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

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 FY 2016. The total number of persons submitting WB TCRs from abroad during FY 2016 was 464, which constitutes approximately 10 

percent of the individuals participating in the Commission’s whistleblower program.


OFFICE OF THE WHISTLEBLOWER

Washington, DC