______________________________________________________________________________ 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 97450 / May 8, 2023 

WHISTLEBLOWER AWARD PROCEEDING 

File No. 2023-57 

______________________________________________________________________________ 

In the Matter of the Claim for Award

in connection with 

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Notice of Covered Action 

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ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM 

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The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending the 

denial of the whistleblower award claim submitted by (“Claimant”) in 

connection with 

(“Covered Action”). Claimant filed a timely response contesting the 

preliminary denial.

1 For the reasons discussed below, Claimant’s award claim is denied. 

I. Background

A. The Covered Action

On the Commission instituted public administrative cease-and-desist 

proceedings against (“Respondent 1”)— 

—and (“Respondent 2”)— 

—(collectively, “Respondents”) for their roles in a

 Respondent 1 

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See Exchange Act Rule 21F-10(e), 17 C.F.R. § 240.21F-10(e). 1 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respondent 2 

 The Covered Action found that Respondents 

violated 

 and that Respondent 2 caused certain violations by Respondent 1. Respondents 

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consented to the Covered Action without admitting or denying the allegations and agreed to pay 

over in monetary sanctions.

2

 Respondent 2 also agreed to 

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On 

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the Office of the Whistleblower (“OWB”) posted the Notice of 

Covered Action on the Commission’s public website inviting claimants to submit whistleblower 

award applications within 90 days.3 Claimant filed a timely whistleblower award claim. 

B. The Preliminary Determination

On 

Redacted

the CRS issued a Preliminary Determination4 recommending that 

Claimant’s claim be denied.5 The Preliminary Determination recommended a denial for two 

reasons. 

First, Claimant was not a “whistleblower” within the meaning of Rule 21F-2(b) with 

respect to the Covered Action. To qualify as a whistleblower, an individual must (among other 

things) provide information regarding a potential securities law violation to the Commission in 

the form and manner that is required by Rule 21F-9(a), which Claimant did not do. The CRS 

reasoned that Claimant was not a whistleblower for award purposes until Claimant submitted 

 in 

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information on a TCR to the Commission in In fact, four years passed between 

the time of Claimant’s and Claimant’s TCR 

submission to the Commission in Therefore, Claimant also was not eligible for 

the 120-day lookback provision set forth in Rule 21F-4(b)(7).6

2 

All monetary 

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sanctions—including those imposed upon Respondents—have been paid in full. 3 See Exchange Act Rule 21F-10(a), 17 C.F.R. § 240.21F-10(a). 4 See Exchange Act Rule 21F-10(d), 17 C.F.R. § 240.21F-10(d). 5 The record supporting the Preliminary Determination included the declaration (“Declaration”) of one of the 

Division of Enforcement (“Enforcement”) attorneys who was assigned to the investigation that led to the Covered 

Action (“Investigation”). See Exchange Act Rule 21F-12(a), 17 C.F.R. § 240.21F-12(a). 6 See Exchange Act Rule 21F-4(b)(7), 17 C.F.R. § 240.21F-4(b)(7) (“if the claimant “provide[s] information 

to . . . an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible 

violations of law, and [the claimant], within 120 days, submit[s] the same information to the Commission pursuant 

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Second, Claimant’s TCR submission was not made voluntarily as required by Exchange 

Act Section 21F and Rules 21F-3 and 21F-4(a)(1) because Claimant made the submission after a 

request, inquiry, or demand that relates to the same subject matter as the submission was directed 

to Claimant or anyone representing Claimant by the Commission.7 Specifically, prior to 

Claimant submitting information to the Commission in Commission staff 

contacted Claimant’s counsel in and Claimant received a subpoena from the 

Commission in Therefore, Claimant’s TCR submission was not voluntary 

because it was submitted only after the Commission inquired with Claimant relating to the same 

subject matter as Claimant’s submission. 

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C. Claimant’s Response to the Preliminary Determination 

In response, Claimant first argues that the Preliminary Determination erred in finding that 

Claimant was not a “whistleblower” within the meaning of Rule 21F-2(b) with respect to the 

Covered Action. According to Claimant, the Preliminary Determination 

Claimant states that the Preliminary Determination’s 120-day argument is at 

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best a technicality that is inconsistent with the public policy of rewarding legitimate, good faith 

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whistleblowers. Claimant alleges that his/her TCR submission did not cause 

any prejudice to the Commission or any other entity or person because the Covered Action was 

Redacted

not filed until 

Claimant also argues that the Preliminary Determination erred in finding that Claimant’s 

TCR submission was not made voluntarily. Claimant asserts that he/she had been voluntarily 

***

cooperating with the Commission, in a variety of matters, for a number of years, dating back to 

Claimant alleges that his/her TCR was submitted prior to the date of his/her voluntary 

testimony with the Commission. 

Finally, Claimant argues that even if he/she did not comply with the whistleblower 

program rules (“Rules”), the Commission should exercise its discretionary authority to waive 

requirements under the Rules and grant Claimant an award. Claimant alleges that the Covered 

to [Rule 21F-9], as [the claimant] must do in order for [the claimant] to be eligible to be considered for an award, 

then, for purposes of evaluating [the claimant’s] claim to an award . . . the Commission will consider that [the 

claimant] provided information as of the date of [the claimant’s] original disclosure, report or submission.”). 

See Exchange Act Section 21F, 15 U.S.C. §78u-6; Exchange Act Rule 21F-3, 17 C.F.R. § 240.21F-3; 

Exchange Act Rule 21F-4(a)(1), 17 C.F.R. § 240.21F-4(a)(1). 

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Action contains claims that were based on facts contained in Claimant’s TCR and that Claimant 

has helped the government recover

Redacted

 Citing a Commission order in which the 

Commission exercised its authority under Section 36(a) of the Exchange Act to award a 

whistleblower an award even though that whistleblower failed to comply with Rule 21F-9(d), 

Claimant alleges that the Commission has used its discretion in the past to grant claimants 

awards despite procedural deficiencies in their applications for whistleblower awards. Claimant 

believes that the interests of justice and fairness require that the Commission exercise its 

discretionary authority. Claimant alleges that he/she has suffered substantial hardship as a result 

of his/her whistleblowing. 

II. Analysis 

We deny an award to Claimant in connection with the Covered Action because 

Claimant’s information submission was not made voluntarily as required by Exchange Act 

Section 21F and Rules 21F-3 and 21F-4(a)(1). Further, there is no compelling reason for us to 

exercise our discretionary authority to waive requirements under the Rules. Because the claim 

fails on the basis that Claimant did not submit the information to the Commission voluntarily, we 

decline to reach the merits of the issue whether Claimant is a “whistleblower” with respect to the 

Covered Action. 

Claimant wrote

The Declaration, which we credit, confirmed under penalty of perjury that the staff 

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responsible for the Covered Action (“Staff”) did not receive information directly from Claimant 

until only after Staff first contacted Claimant in Specifically, in 

 conducted an 

internal investigation. Respondent 1 self-reported to the Commission. The 

internal investigation and Respondent 1’s self-report validated many, but not all, of the 

Redacted

allegations discussed in the 

 Respondent 1 made a presentation to Staff. 

During that presentation, Respondent 1 stated that 

caused Staff to 

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expand the scope of the matter beyond Respondent 2 and certain of his/her direct reports. 

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In 

 Staff opened a matter under inquiry (“MUI”) as a result of the information 

contained in Respondent 1’s self-report and In Staff 

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converted the MUI into the Investigation, and in 

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 Staff obtained a Formal Order of 

Investigation. 

According to the Declaration, in 

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Staff reached out to Claimant’s thencounsel. Staff and Claimant’s then-counsel set up the logistics of Staff taking Claimant’s 

testimony. On Staff subpoenaed Claimant to provide documents and 

testimony about On Claimant 

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provided testimony before the Commission; Claimant produced substantive documents to the 

Commission in advance of that testimony. Staff did not receive any information regarding the 

directly from Claimant or his then-counsel before Claimant’s 

document production and testimony before the Commission. On —four 

years after —Claimant submitted a TCR 

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through his new (and current) counsel to the Commission. In the TCR, Claimant reported 

information that was consistent with the information and documents Claimant provided to Staff 

and with Claimant’s testimony before the Commission. 

Based on this factual record, Claimant’s information submission was not made 

voluntarily as required by Exchange Act Section 21F and Rules 21F-3 and 21F-4(a)(1).8 For a 

claimant’s submission to be made voluntarily, it must be provided to the Commission “before a 

request, inquiry, or demand that relates to the subject matter of your submission is directed to 

you or anyone representing you (such as an attorney)” by the Commission.9 

Here, Claimant only submitted information to the Commission Staff requested to 

schedule testimony with the Claimant and after Staff subpoenaed Claimant to provide documents 

and testimony. Claimant submitted his/her TCR on —four years after 

—which was also the same date that Claimant testified 

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before the Commission. Claimant’s TCR related to the same subject matter as the subpoena that 

Staff issued Claimant. 

None of Claimant’s arguments dissuade us from denying Claimant’s claim for award. 

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Although Claimant states that he/she had been cooperating with the Commission dating back to 

at least Claimant’s prior contact with the Commission concerned misconduct involving 

allegations that 

 the Commission brought an enforcement action 

related to this matter in Claimant’s other assertions—that the Preliminary Determination 

erred in not taking into account the

 that Claimant should be awarded for being 

8 See Exchange Act Rule 21F-3, 17 C.F.R. § 240.21F-3; Exchange Act Rule 21F-4(a)(1), 17 C.F.R. § 

240.21F-4(a)(1). 9 Exchange Act Rule 21F-4(a)(1), 17 C.F.R. § 240.21F-4(a)(1). 

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a legitimate, good faith whistleblower; that Claimant’s TCR submission in did 

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not cause any prejudice to the Commission because the Covered Action was not filed until

 and that Claimant has suffered substantial hardship after his/her whistleblowing— 

do not alter the fact that under the Rules, his/her information submission was made after the ***

Commission’s request and was therefore not made voluntarily. Claimant is thus precluded 

from receiving an award for the Covered Action. 

The circumstances in this matter do not warrant invoking our Section 36(a) exemptive 

authority to waive Claimant’s non-compliance with the Rules. Section 36(a) grants the 

Commission the authority in certain circumstances to “exempt any person . . . from any provision 

or provisions of this title or of any rule or regulation thereunder, to the extent that such 

exemption is necessary or appropriate in the public interest, and is consistent with the protection 

of investors.” In whistleblower matters, the Commission has found that the public interest 

warranted an exemption from a rule requirement in a limited number of cases where the unique 

circumstances of the particular matter raised considerations substantially different from those 

which had been considered at the time the rules were adopted, and a strict application of the rules 

would result in undue hardship, unfairness, or inequity.11 Given the factual circumstances 

involved here, we do not believe that any such considerations exist. 

Claimant submitted his/her information in 

 but did not submit information to the Commission until Claimant only 

submitted information to the Commission after Staff contacted Claimant in and 

subpoenaed him/her in for documents and testimony. There is nothing in the 

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record that excuses or provides a justification for the delay in the submission of the information 

to the Commission until after the Commission requested to schedule testimony with the 

Claimant. We thus conclude that it is inappropriate for us to invoke our Section 36(a) exemptive 

authority to waive Claimant’s non-compliance with the Rules. 

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See, e.g., Order Determining Whistleblower Award Claim, Rel. No. 34-86010 (June 3, 2019) (“voluntary” 

requirement of Rule 21F-4(a) waived where, among other factors, claimants were not notified of request from SRO 

that preceded their whistleblower submission); Order Determining Whistleblower Award Claims, Rel. No. 34-84046 

(Sept. 6, 2018) (“voluntary” requirement waived where, among other factors, claimant learned the information 

he/she reported after he/she was interviewed by other agency); Order Determining Whistleblower Award Claims, 

Rel. No. 34-90721 (Dec. 18, 2020) (claimant’s counsel used information from the claimant to submit an application 

as a whistleblower on behalf of themselves); Order Determining Whistleblower Award Claims, Rel. No. 34-90580 

(Dec. 7, 2020) (counsel misunderstood communications from the staff about whether the claimant met the 

procedural requirements for participating in the whistleblower program). 

6 
 

 

As relevant to our Section 36(a) considerations, we also note that at the time that 

Claimant provided his/her information internally, Claimant

 Here, Respondent 1 promptly selfreported misconduct to the Commission 

 Thus, Respondent 1’s internal whistleblower, legal, 

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or compliance procedures for reporting allegations of possible violations of law worked properly. 

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III. Conclusion

Accordingly, it is hereby ORDERED that the whistleblower award application of

Claimant in connection with the Covered Action be, and it hereby is, denied. 

By the Commission. 

Vanessa A. Countryman 

Secretary 

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