_________________________________________________________________________ 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 98196 / August 22, 2023 

WHISTLEBLOWER AWARD PROCEEDING 

File No. 2023-76

_________________________________________________________________________ 

In the Matter of the Claim for an Award 

in connection with 

Redacted

Notice of Covered Action Redacted

ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS 

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

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

connection with the above-referenced covered action (the “Covered Action”). Claimant filed a 

timely response contesting the preliminary denial. For the reasons discussed below, Claimant’s 

award claim is denied. 

I. Background

A. The Covered Action

On the Commission filed an action against (the 

“Company”) and individuals: and 

Redacted Redacted *** Redacted

Claimant (collectively, the “Defendants”), charging Defendants with violations of the federal 

securities laws for All of the Defendants, including 

Each Defendant, including Claimant, consented 

Claimant, were charged with 

Redacted

Redacted

Redacted Redacted

to a final judgment enjoining each Defendant, including Claimant, from violating the securities 

Redacted

In total, Defendants were ordered to pay approximately Redactedlaws. in disgorgement, 

 in prejudgment interest, and in civil penalties. Of that, Claimant was 
 

 

 

 

 

 

 

 

 

 

ordered to pay Redacted in disgorgement, Redacted in prejudgment in interest, and a Redactedcivil 

penalty. 

On Redactedthe Office of the Whistleblower (“OWB”) posted the Notice for 

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

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

claim. 

B. The Preliminary Determination 

The CRS issued a Preliminary Determination recommending that Claimant’s claim be 

denied because the submission upon which Claimant based his/her claim for award 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 subject 

matter of Claimant’s submission was directed to Claimant by the Commission. The CRS further 

noted that Commission staff directed a subpoena to Claimant as an officer of the Company, 

followed by a subpoena requesting identical materials directed to Claimant at his/her home 

residence. Approximately four weeks later, Claimant provided his/her tip to the Commission at 

the same time Claimant responded to the subpoenas. The CRS preliminarily determined that 

Claimant’s information related to the same subject matter as the information called for in the 

subpoena. 

Finally, the CRS stated that because Claimant’s submission was not made voluntarily, the 

CRS would not separately analyze whether Claimant is also excluded from award eligibility 

under Rule 21F-16.1 

C. Claimant’s Response to the Preliminary Determination 

Claimant submitted a timely written response contesting the Preliminary 

Redacted

Determinations.2 Claimant principally argues that the Covered Action involved 

 and requests that OWB “view these as two separate situations and give [Claimant] a 

Redacted

whistleblower award for information *** provided to the Staff relating to the [misconduct], which 

[Claimant] had no involvement with and was a victim of.” Redacted Claimant argues that Claimant’s 

Redacted ***

perpetuated by Redacted

culpability did not relate to any misconduct involving (the “First Misconduct”) 

 other individual Defendants, but only to misconduct involving 

 (the “Second Misconduct”). 

Claimant also contends that Claimant contacted his/her attorney on Redacted

 eleven 

days before Clamant received a subpoena from the Commission. Claimant stated that Claimant 

earlier, but [Claimant’s] report was delayed because 

repeatedly promised [Claimant] that [Claimant’s] money would be returned . . . . [Claimant’s] 

view at the time was that the [Second Misconduct was] all part of an effort to perpetrate the 

1 Rule 21F-16 concerns whistleblowers who engage in culpable conduct. See 17 C.F.R. § 240.21F-16. 

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

was a victim of a scam, and that Claimant “would have pursued this [whistleblower] report years Redacted
 

 

 

 

 

 

[First Misconduct].” Claimant also states that the Commission’s subpoena related to the Second 

Misconduct, not to the First Misconduct. 

Lastly, Claimant contends that Claimant’s submission was the first report the 

Commission received relating to the First Misconduct, and that report

Redacted

 “led to the successful 

prosecution” of Defendants. 

II. Analysis 

To qualify for an award under Section 21F of the Exchange Act, a whistleblower must 

voluntarily provide the Commission with original information that leads to the successful 

enforcement of a covered action.3 Under Exchange Act Rule 21F-4(a), a submission to the 

Commission is considered “voluntary” if, as relevant here, it is provided “before a request, 

inquiry, or demand that relates to the subject matter of [the] submission” is directed to the 

claimant or the claimant’s representative “[b]y the Commission” or in “connection with an 

investigation by . . . any other authority of the federal government.”4 If the Commission directs 

a request, inquiry, or demand to a claimant or his/her representative before the claimant makes a 

submission, “[the claimant’s] submission will not be considered voluntary, and [the claimant] 

will not be eligible for an award.”5

 The purpose of the rule is to “creat[e] a strong incentive for 

whistleblowers to come forward early with information about possible violations of the securities 

laws rather than wait until Government or other official investigators ‘come knocking on the 

door.’”6 Rule 21F-4(a)(1) establishes a “simple and straightforward test for when we will treat a 

whistleblower as having submitted information voluntarily; as relevant here, the whistleblower 

must provide his or her tip to the Commission before investigators direct a ‘request, inquiry, or 

demand’ to the whistleblower that relates to the subject matter of the tip.”7 However, a 

claimant’s submission also will be considered voluntary if the claimant “voluntarily provided the 

same information to one of the other authorities identified above [in Rule 21F-4(a)(1)],” such as 

Congress, other authorities of the federal government, or a state attorney general or securities 

regulatory authority, “prior to receiving a request, inquiry, or demand from the Commission.”8 

Claimant does not qualify for a whistleblower award in this matter because Claimant 

does not meet the voluntary submission requirement of Rule 21F-4(a). Enforcement staff issued 

two subpoenas to Claimant, both of which contained identical requests for production of 

3 Exchange Act Section 21F(b)(1), 15 U.S.C. § 78u-6(b)(1). 

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

5 Exchange Act Rule 21F-4(a)(2), 17 C.F.R. § 240.21F-4(a)(2). 

6 Proposing Release for Whistleblower Rules, 75 Fed. Reg. 70488, 70,490 (Nov. 17, 2010); see also Securities 

Whistleblower Incentives and Protections, 76 Fed. Reg. 34300, 34,307 (June 13, 2011) (stating that a 

“whistleblower award should not be available to an individual who makes a submission after first being questioned 

about a matter (or otherwise requested to provide information) by the Commission staff acting pursuant to any of 

[its] investigative or regulatory authorities”). 

7 Order Determining Whistleblower Award Claim, Exchange Act Release No. 84046 at 8 (Sept. 6, 2018). 

8 Exchange Act Rule 21F-4(a)(2), 17 C.F.R. § 240.21F-4(a)(2). 
 

 

 

 

 

 

 

 

 

 

 

documents. The record shows that both subpoenas requested documents relating to the First 

Misconduct as well as requests relating to the Second Misconduct. Claimant responded to the 

subpoenas approximately four weeks later and submitted a TCR at the same time. As stated in 

Claimant’s response to the Preliminary Determination, the First Misconduct “is the subject of 

[Claimant’s] whistleblower tip.” Enforcement staff confirmed, in a supplemental declaration, 

that the subpoenas requested documents relating to the First Misconduct and Claimant’s response 

to the subpoenas also related to the First Misconduct. Accordingly, because Claimant did not 

submit his/her tip before the Commission issued subpoenas to Claimant relating to the subject 

matter of Claimant’s tip, Claimant’s submission is not voluntary. 

We are not persuaded by Claimant’s argument that “the subpoena[s] related to the 

[Second Misconduct], not to the [First Misconduct],” and that Claimant should receive an award 

based upon the information Claimant provided relating to the First Misconduct. As confirmed 

by staff in a supplemental declaration, which we credit, the subpoenas requested materials 

relating to both the First Misconduct and the Second Misconduct, and in response Claimant 

provided materials related to both. Because Claimant did not provide those materials until after 

Claimant received the subpoenas from the Commission, and Claimant’s tip related to the subject 

matter of the Commission’s subpoenas, Claimant’s submission cannot be considered voluntary 

pursuant to Rule 21F-4.9 

Accordingly, Claimant is not eligible for a whistleblower award.10 

III. Conclusion 

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

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

By the Commission. 

Vanessa A. Countryman 

Secretary 

9 To the extent that Claimant argues that his/her submission is voluntary because Claimant contacted his/her counsel 

regarding a whistleblower submission before Claimant received the subpoenas, we disagree. Exchange Act Rule 

21F-4(a) requires an actual submission of information to the Commission or the other identified authorities to 

determine whether that submission is voluntary. Claimant did not submit his/her tip to the Commission or any other 

identified authorities until approximately four weeks after receiving the subpoenas. 

not submit his/her information voluntarily, Claimant is not eligible for an award on that ground alone. Further, 

while Claimant notes that “[Claimant]’s culpability is only in relation to the [Second Misconduct],” Claimant’s 

culpability was not analyzed by the CRS and was not a ground for the CRS’s preliminary denial recommendation. 

As such, we do not analyze this issue here and it is likewise not a basis for our denial. 

10 Claimant also notes in his/her response to the Preliminary Determination that Claimant’s submission “led to the 

successful prosecution” of However, Claimant’s argument is not relevant here. 

The CRS’s Preliminary Determination did not made any recommendation on this issue, and because Claimant did 

Redacted