2014 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. 
CONTENTS 

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

History and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
 

Activities of the Office of the Whistleblower . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
 

Claims For Whistleblower Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
 

Whistleblower Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
 

Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
 

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

Curbing Abuses in the Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
 

Claim Denials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
 

Profiles of Whistleblower Award Recipients . . . . . . . . . . . . . . . . . . . . . . . . . . .16
 

Efforts At Combatting Retaliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
 

SEC’s First Anti-Retaliation Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
 

Amicus Curiae Briefs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
 

Whistleblower Tips Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
 

Increase in Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
 

Whistleblower Allegation Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
 

Geographic Origin of Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
 

Processing of Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
 

TCR Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
 

Assistance by OWB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
 

Securities and Exchange Commission Investor Protection Fund . . . . . . . . . . . .26
 

Appendix A . Whistleblower Tips by Allegation Type
 

Appendix B . Whistleblower Tips Received by Geographic Location—
 

United States and its Territories
 

Appendix C . Whistleblower Tips Received by
 

Geographic Location—International
 

Comparison of Fiscal Years 2012, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . .27
 

Fiscal Year 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
 

Fiscal Year 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
 

Report available on the Web at: 

http://www.sec.gov/about/offices/owb/annual-report-2014.pdf 

DODD-FRANK WHISTLEBLOWER PROGRAM | 1 

MESSAGE FROM THE CHIEF OF THE 

OFFICE OF THE WHISTLEBLOWER 

Pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (“Dodd-Frank Act”), the U.S. Securities and Exchange Commission 

(“Commission” or “SEC”) created a whistleblower program designed to encourage the 

submission of high-quality information to aid Division of Enforcement (“Enforcement”) 

staff in discovering and prosecuting violations of the federal securities laws. There are 

three integral components of the Commission’s whistleblower program—monetary 

awards, retaliation protection, and confidentiality protection—each of which is equally 

important to the continued success of the program. During Fiscal Year 2014, the 

Office of the Whistleblower (“OWB” or “Office”) administered the Commission’s 

whistleblower program with an eye to furthering each of these objectives. 

Fiscal Year 2014 was historic for the Office in terms of both the number and dollar 

amount of whistleblower awards. The Commission issued whistleblower awards to 

more individuals in Fiscal Year 2014 than in all previous years combined. Since the 

inception of the whistleblower program, the Commission has authorized awards to 

fourteen whistleblowers. The SEC authorized awards to nine of these whistleblowers in 

Fiscal Year 2014. Each of these whistleblowers provided original information that led or 

significantly contributed to a successful enforcement action. 

Not only did the number of whistleblower awards rise significantly, but the magnitude 

of the award payments was record-breaking. On September 22, 2014, the Commission 

authorized an award of more than $30 million to a whistleblower who provided key 

original information that led to a successful enforcement action. The whistleblower 

in this matter provided information of an ongoing fraud that otherwise would have 

been very difficult to detect. The award is the largest made by the SEC’s whistleblower 

program to date and the fourth award to a whistleblower living in a foreign country, 

demonstrating the program’s international reach. We hope that awards like this one 

will incentivize company and industry insiders, or others who may have knowledge of 

possible federal securities law violations, both in the U.S. and abroad, to come forward 

and report their information promptly to the Commission. 

Two other whistleblower awards made this year drive home another important 

message—that companies not only need to have internal reporting mechanisms in 

place, but they must act upon credible allegations of potential wrongdoing when voiced 

by their employees. For example, the Commission’s Final Order of July 31, 2014 

reflects that the whistleblower in that matter worked aggressively internally to bring 

the securities law violations to the attention of appropriate company personnel. The 

whistleblower brought the information to the SEC only after the company failed to take 

corrective action. Similarly, on August 29, 2014, the Office announced a whistleblower 

award to a company employee with audit and compliance responsibilities who reported 

the securities violation internally and then reported the violation to the SEC after the 

company failed to take appropriate, timely action in response to the information. 

Persons with internal audit or compliance-related functions may be eligible under 

“The Commission 

issued whistleblower 

awards to more 

individuals in Fiscal 

Year 2014 than in 

all previous years 

combined. ” 
 

 

2 | U .S . SECURITIES AND EXCHANGE COMMISSION 

the program in certain limited circumstances, including where the individual reports 

the securities law violation internally and then waits 120 days before reporting the 

information to the Commission. 

Fiscal Year 2014 also saw significant additional payments being made to individuals 

who had received awards in previous years. Because of the Commission’s collection 

efforts, additional amounts were recovered in certain actions which, in turn, increased 

the amounts paid to whistleblowers in those matters. For example, our very first award 

recipient has seen the whistleblower award increase from the initial payout of nearly 

$50,000 to over $385,000, more than seven times the original payment amount. 

Last year, OWB reported that it was coordinating actively with Enforcement staff to 

identify matters where retaliatory measures were taken against whistleblowers. On 

June 16, 2014, the Commission brought its first enforcement action under the antiretaliation provisions of the Dodd-Frank Act. In that case, the head trader of Paradigm 

Capital Management reported to the SEC that the company had engaged in prohibited 

principal transactions. After learning that the head trader reported the potential 

misconduct to the SEC, the firm engaged in a series of retaliatory actions, including 

changing the whistleblower’s job function, stripping the whistleblower of supervisory 

responsibilities and otherwise marginalizing the whistleblower. The Commission 

ordered the firm to pay $2.2 million to settle the retaliation and other charges. The 

Commission’s action sends a strong message to employers that retaliation against 

whistleblowers in any form is unacceptable. 

The SEC also filed amicus curiae briefs in several private cases pending in the federal 

courts to address the scope of the anti-retaliation employment protections established 

by the Dodd-Frank Act. The Commission argued that the anti-retaliation protections 

should not be interpreted narrowly to reach only individuals who make disclosures 

directly to the Commission. Rather, the employment protections should be understood 

to protect individuals at publicly-traded companies from employment retaliation 

who internally report potential securities law violations. The SEC explained that the 

whistleblower program was designed to encourage employees to report internally 

instances of potential securities violations and was not meant to replace or undercut 

corporate compliance programs. But any refusal to provide anti-retaliation protection to 

individuals who report wrongdoing internally at publicly-traded companies could create 

the unintended result of causing whistleblowers to forgo internal compliance programs 

and instead report directly to the SEC. 

Confidentiality protection for whistleblowers also is one of the Office’s paramount 

objectives. Confidentiality may be particularly important in cases where the 

whistleblower currently is employed at the company that is the subject of his or her 

tip or continues to work in the same or similar industry. During Fiscal Year 2014, the 

Office worked with other SEC staff to ensure that those who work with whistleblowers 

or who may review whistleblower information understand their confidentiality 

obligations under the Dodd-Frank Act and the Commission’s implementing regulations. 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 3 

As a result of the Commission’s issuance of significant whistleblower awards, 

enforcement of the anti-retaliation provisions, and protection of whistleblower 

confidentiality, the agency has continued to receive an increasing number of 

whistleblower tips. In Fiscal Year 2014, OWB received 3,620 whistleblower tips, a 

more than 20% increase in the number of whistleblower tips in just two years. 

The Office also staffs a public hotline to answer questions from whistleblowers or 

their counsel concerning the whistleblower program or how to go about submitting 

information to the agency. In the past fiscal year, we returned over 2,731 calls from 

members of the public. 

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

potential securities law violation, including whether they were retaliated against for 

reporting the information, to submit the tip via the online portal on OWB’s webpage 

(http://www.sec.gov/whistleblower) or by submitting a Form TCR by mail or fax, also 

located on OWB’s webpage. If a whistleblower or his or her counsel has any question 

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

the program, they should call the whistleblower hotline at (202) 551-4790. 

Sean X. McKessy 

Chief, Office of the Whistleblower 

November 17, 2014 
4 | U .S . SECURITIES AND EXCHANGE COMMISSION 

HISTORY AND PURPOSE 

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

Act”)2 by, among other things, adding Section 21F,3 entitled “Securities Whistleblower 

Incentives and Protection.” Section 21F directs the Commission to make monetary 

awards to eligible individuals who voluntarily provide original information that leads 

to successful Commission enforcement actions resulting in monetary sanctions over 

$1,000,000, and successful related actions. 

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

sanctions collected. To ensure that whistleblower payments would not diminish the 

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

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

whistleblowers would be paid. 

The Commission established OWB, a separate office within Enforcement, to administer 

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

whistleblower program that will help the Commission identify and halt frauds early and 

quickly to minimize investor losses. 

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

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

regulations (the “Final Rules”)4

 prohibit retaliation against whistleblowers who report 

possible wrongdoing based on a reasonable belief that a possible securities violation has 

occurred, is in progress or is about to occur.5 

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

corporate compliance programs. While it provides incentives for insiders and others 

with information about unlawful conduct to come forward, it also encourages them to 

work within their company’s own compliance structure, if appropriate.6 

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

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

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

Commission to submit an annual report to Congress that addresses the following 

subjects: 

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

awards granted and the type of cases in which awards were granted during the 

preceding fiscal year; 

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

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

2 15 U.S.C. § 78a et seq.
 

3 15 U.S.C. § 78u-6.
 

4 240 C.F.R. §§ 21F-1 through 21F-17.
 

5 15 U.S.C. § 78u-6(h)(1); 240 C.F.R. § 21F-2(b).
 

6 

 See 240 C.F.R. §§ 21F-4(b)(7), 21F-6(a)(4), 21F-6(b)(3).
 
DODD-FRANK WHISTLEBLOWER PROGRAM | 5 

•	 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 Fiscal Year 2014, and the processing of those whistleblower tips primarily 

address the requirements of Section 924(d) of the Dodd-Frank Act. The sections in this 

report addressing the whistleblower incentive awards made during Fiscal Year 2014 and 

the Fund primarily address the requirements of Section 21F(g)(5) of the Exchange Act. 
 

 

6 | U .S . SECURITIES AND EXCHANGE COMMISSION 

“One of the 

Office’s primary 

goals is to 

increase public 

awareness 

about the 

Commission’s 

whistleblower 

program.” 

ACTIVITIES OF THE OFFICE OF THE 

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. Sean X. McKessy is the Chief of the Office and Jane A. Norberg 

is the Office’s Deputy Chief. In addition to Mr. McKessy and Ms. Norberg, OWB 

currently is staffed by nine attorneys and three paralegals. 

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 what OWB 

does relates to the assessment of claims for whistleblower awards. 

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

action that results in monetary sanctions of over $1,000,000. Anyone who believes that 

they are entitled to a whistleblower award may submit an application in response to a 

posted NoCA. 

OWB staff tracks investigations where a known whistleblower has provided 

information or assistance to Enforcement staff. This case-tracking initiative is intended 

to help OWB know which cases may involve a potential award payout. Although it 

ultimately is the whistleblower’s responsibility to make a timely application for an 

award, OWB often contacts whistleblowers who have been actively working with 

Enforcement staff to confirm they are aware of the posted NoCA and the applicable 

deadline for submitting a claim for award. 

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

confer with Enforcement staff to understand in more detail the contribution of the 

claimant, and then make recommendations to the Claims Review Staff and to the 

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

the SEC, as well as what awards were made during Fiscal Year 2014, please refer to 

pages 10-15 of this report. 

Public Outreach and Education 

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

Commission’s whistleblower program. By raising awareness of the program, we hope 

to receive an even greater number of high-quality tips that can assist the Commission in 

discovering and stopping fraudulent schemes early. As part of that outreach effort, the 

Office has actively participated in numerous webinars, media interviews, presentations, 

press releases, and other public communications. 

In Fiscal Year 2014, OWB staff participated in over 17 public engagements and 

conducted several media interviews aimed at promoting and educating the public 

concerning the Commission’s whistleblower program. The Office’s target audience 

generally includes potential whistleblowers, whistleblower counsel, corporate 

compliance counsel and professionals. In an effort to increase the visibility of the 
 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 7 

Commission’s whistleblower program, the Office has participated on legal panels and 

in other forums with other federal agencies that have similar whistleblower programs, 

including the U.S. Commodity Futures Trading Commission and the Internal Revenue 

Service. Fiscal Year 2014 also saw OWB participate at international venues with 

whistleblower offices from around the world both to help raise awareness of the 

program and facilitate our understanding and implementation of best practices. 

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

website (www.sec.gov/whistleblower). The website includes videos by Mr. McKessy that 

provide an overview of the program and information about how tips, complaints and 

referrals are handled. The website also contains detailed information about the program, 

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

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

resources, and answers to frequently asked questions. 

In Fiscal Year 2014, to increase transparency regarding claims for awards that the 

Commission has reviewed, we created a separate page on the website where all Final 

Orders issued by the Commission either awarding or denying a claim for an award 

are posted.7

 OWB’s site also contains a link to the webpage of Enforcement’s Financial 

Reporting and Audit Task Force, the objective of which is to identify and prosecute 

securities law violations related to financial reporting and audit failures. Information from 

a corporate insider or gatekeeper can often act as the springboard for the SEC to launch 

an investigation or provide the final piece of the puzzle in an existing investigation. 

Communications with Whistleblowers 

The Office 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 

that has been in operation since May 2011 to respond to questions from the community 

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 on voicemail boxes unless the 

caller’s name is clearly and fully identified. If we are not able to leave a message because 

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

attorneys make two additional attempts in an effort to contact the individual. 

During Fiscal Year 2014, the Office returned over 2,731 phone calls from members of 

the public. Many of the calls the Office receives relate to how the caller should submit 

a tip in order to be eligible for an award; concerns about how the Commission will 

maintain the confidentiality of his or her identity; information on the investigative 

process or how to track an individual’s complaint status; or whether the SEC is the 

appropriate agency for the caller to submit his or her information. 

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. 

“During Fiscal 

Year 2014, the 

Office returned 

over 2,731 phone 

calls from 

members of the 

public.” 

See http://www.sec.gov/about/offices/owb/owb-final-orders.shtml. 7 
8 | U .S . SECURITIES AND EXCHANGE COMMISSION 

Training and Assistance to Commission Staff 

OWB serves as the principal point of contact for all Commission staff on any 

whistleblower-related question or issue. Therefore, in addition to participating in 

external communications about the program, we also provide training to Commission 

staff who may be in a position to interact with a whistleblower or who may receive 

information from a whistleblower. 

During Fiscal Year 2014, we continued to provide training on the whistleblower 

program for Enforcement staff. Our training program included initiatives to inform 

the staff concerning the Commission’s authority under the Dodd-Frank Act to 

bring enforcement actions for retaliation against whistleblowers. We also provided 

whistleblower training to staff in the Commission’s Office of Compliance, Inspections, 

and Examinations (“OCIE”), who may find themselves on the receiving end of 

whistleblower information during the course of an examination. 

OWB also communicates with Commission staff regarding the handling of 

confidential whistleblower-identifying information. In particular, OWB coordinates 

with Commission staff in making external referrals to other government agencies 

and responding to discovery requests consistent with the confidentiality provisions 

of the Dodd-Frank Act and the Commission’s whistleblower rules. OWB also 

assists Enforcement staff in handling potentially privileged information provided by 

whistleblowers. 

Anti-Retaliation Protection 

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 whistleblower 

anti-retaliation protections under the Dodd-Frank Act. OWB works with Enforcement 

staff on potential anti-retaliation enforcement actions where appropriate. On June 16, 

2014, the Commission brought its first anti-retaliation case, charging a hedge fund 

with engaging in retaliatory practices after learning that the head trader had reported 

prohibited principal transactions to the Commission. OWB also monitors federal court 

cases involving the anti-retaliation provisions of the Dodd-Frank Act and the SarbanesOxley Act of 2002.8 For a fuller discussion of the steps the Commission has undertaken 

with respect to anti-retaliation during Fiscal Year 2014, please see pages 18-19. 

In addition, OWB has been working to identify employee confidentiality, severance, 

and other kinds of agreements that may interfere with an employee’s ability to report 

potential wrongdoing to the SEC. Rule 21F-17(a) under the Exchange Act 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.”9

 The Office is actively working with Enforcement staff to identify 

8 18 U.S.C. § 1514A. 

9 240 C.F.R. § 21F-17(a). 
DODD-FRANK WHISTLEBLOWER PROGRAM | 9 

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

that may violate this Commission rule. We will continue to focus on agreements that 

attempt to silence employees from reporting securities violations to the Commission by 

threatening liability or other kinds of punishment. 

TCR Intake 

The Commission developed its Tips, Complaints, and Referrals Intake and Resolution 

System (“TCR System”), an internal database, to serve as a central repository for all tips 

and complaints, as well as referrals from other government agencies or self-regulatory 

organizations, that are received by the Commission. Rule 21F-9 under the Exchange 

Act provides whistleblowers the option of either submitting their tips directly into the 

TCR System through the Commission’s online portal, or by mailing or faxing a Form 

TCR to OWB. This procedure assists whistleblowers who may not have ready access 

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

hard-copy format. In those cases where whistleblowers elect to send in a Form TCR, 

OWB manually enters it 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. 

Key Performance Measures 

Section 922(d) of the Dodd-Frank Act required the Office of the Inspector General 

(“OIG”) to conduct a study of the Commission’s whistleblower program and submit 

a report of findings. OIG issued its final report on January 18, 2013, which is posted 

on OWB’s website. In response to a recommendation in the OIG report, the Office 

developed performance metrics in several key areas to strengthen its internal controls. 

During Fiscal Year 2014, OWB continued to perform testing to evaluate whether it 

was meeting its internal goals and objectives. For instance, on a periodic basis, OWB 

conducts analyses to determine whether all eligible cases are posted as NoCAs to its 

website, the percentage of calls returned by OWB to messages left on the hotline within 

24 business hours, and the average number of business days between the issuance of a 

Final Order of the Commission and written notification to the claimant. We intend to 

continue undertaking key performance measures in order to ensure the Office is prompt 

in responding to whistleblowers and other interested parties and to evaluate whether the 

program is operating effectively. 

“On September 

22, 2014, the 

Commission 

authorized an 

award of 

more than

$30 million...” 
10 | U .S . SECURITIES AND EXCHANGE COMMISSION 

CLAIMS FOR WHISTLEBLOWER AWARDS 

Whistleblower Awards 

Since the inception of the Commission’s whistleblower program in August 2011, 

the Commission has authorized awards to fourteen whistleblowers, with awards 

being made to nine whistleblowers during Fiscal Year 2014. In each instance, the 

whistleblower provided high-quality original information that allowed the Commission 

to more quickly uncover and investigate the securities law violation, thereby better 

protecting investors from further financial injury and helping to conserve limited 

agency resources. 

Commission’s Largest Award To Date 

On September 22, 2014, the Commission authorized an award of more than $30 

million to a whistleblower who provided original information that led to a successful 

SEC enforcement action.10 This whistleblower award is more than double the amount 

of the previous highest award made under the SEC’s whistleblower program. 

The information provided by this whistleblower allowed the Commission to discover a 

substantial and ongoing fraud that otherwise would have been very difficult to detect. 

The whistleblower’s information not only led to a successful Commission enforcement 

action, but also to successful related actions. 

This is the fourth award to a whistleblower living in a foreign country. In issuing the 

award, the Commission specifically noted that allowing foreign nationals to receive 

awards under the program best effectuates the clear Congressional purpose underlying 

the award program, which was to further the effective enforcement of the U.S. securities 

laws by encouraging individuals with knowledge of violations of these U.S. laws to 

voluntarily provide that information to the Commission. In the Commission’s view, 

there is a sufficient U.S. territorial nexus whenever a claimant’s information leads to 

the successful enforcement of a covered action brought in the United States, concerning 

violations of the U.S. securities laws, by the Commission. 

In reaching the award determination, the Commission considered the significance 

of the claimant’s information, the assistance provided by the claimant, and the law 

enforcement interests at issue. The Commission also considered the claimant’s delay in 

reporting the securities violations, which was found to be unreasonable. 

The Commission determined that the claimant delayed coming to the Commission 

after first learning of the violation, during which time investors continued to suffer 

significant monetary injury that might otherwise have been avoided. The Commission 

also recognized, however, that some of the period of delay occurred before the 

whistleblower award program was established by the Dodd-Frank Act, and noted 

that, in the Commission’s discretion, it determined not to apply the unreasonable delay 

consideration as severely as it might otherwise have done had the delay occurred entirely 

after the program’s creation. 

10 See Order Determining Award Claim, SEC Rel. No. 73174, File No. 2014-10 (Sept. 22, 2014). 
 

 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 11 

Individual With Compliance or Internal Audit Responsibilities Receives 

Award After Reporting Internally 

On August 29, 2014, the Office announced that the Commission had made an 

award of over $300,000 to a whistleblower who provided critical information to the 

Commission that led to a successful enforcement action.11 

Under the whistleblower rules, information provided by persons with compliance or 

internal audit responsibilities is not considered to be “original information” unless 

an exception applies.12 One of these exceptions permits such individuals to be eligible 

for a whistleblower award if they reported the violations internally to designated 

persons at least 120 days before providing the information to the Commission. In this 

case, the Commission applied this exception to permit an award to the whistleblower 

upon determining that the claimant had reported the information through the proper 

channels at least 120 days before reporting it to the Commission. 

The Commission also denied another individual’s claim for award in the same matter. 

Enforcement staff responsible for the matter had not received any information from 

the claimant that related to the particular covered action upon which the claimant was 

seeking an award. 

Aggressive Internal Reporting Considered in SEC Award 

On July 31, 2014, the Commission awarded more than $400,000 to a whistleblower 

who reported a fraud to the SEC after the company failed to address the issue 

internally.13 

The whistleblower aggressively worked internally to bring the securities law violation 

to the attention of appropriate personnel in an effort to obtain corrective action. 

The Commission recognized the whistleblower’s persistent efforts in reporting the 

information to the Commission after learning that an inquiry by a self-regulatory 

organization (“SRO”) into the matter had been closed and that the whistleblower’s 

internal efforts would not protect investors from future harm. 

Rule 21F-4(a)(1)(ii) under the Exchange Act provides that a whistleblower’s submission 

to the Commission will not be treated as “voluntary” if the whistleblower received 

a previous request relating to the same subject matter in connection with an SRO 

investigation. On the unique facts of this case, however, the Commission found it 

in the public interest and consistent with the protection of investors to invoke its 

general exemptive authority under Section 36(a) of the Exchange Act and waive the 

“voluntary” requirement in order to make an award to the whistleblower. 

Three Whistleblowers Working in Concert To Stop Fraud 

On July 22, 2014, the Commission awarded three whistleblowers collectively 30% 

of the recoveries in an SEC action where the whistleblowers provided information 

and continued to assist and cooperate with Commission staff during the course of 

11 See Order Determining Award Claim, SEC Rel. No. 72947, File No. 2014-9 (Aug. 29, 2014).
 

12 See 240 C.F.R. §§ 21F-4(b)(4)(iii),(v).
 

13 See Order Determining Award Claim, SEC Rel. No. 72727, File No. 2014-8 (July 31, 2014).
 
 

 

 

 

 

 

12 | U .S . SECURITIES AND EXCHANGE COMMISSION 

the investigation.14 Based on the level of assistance each whistleblower provided to 

Enforcement staff, one whistleblower received 15%, another received 10%, and the 

third received 5%, for a total of 30% of the monetary sanctions collected in the action 

both now and in the future. 

$875,000 Awarded to Two Whistleblowers 

On June 3, 2014, the Commission awarded a total of $875,000, to be shared by 

two whistleblowers.15 These whistleblowers acted in concert to voluntarily provide 

information and assistance that helped the SEC bring a successful enforcement action. 

As a result, the Commission split the award evenly between the two whistleblowers. 

Of particular note, a portion of the disgorgement and prejudgment interest in the 

Commission’s action was deemed satisfied by the respondents’ payment of that amount 

in another governmental action. The Commission included those funds for purposes of 

calculating the award payment to the two whistleblowers. 

Whistleblower Tip Results in Emergency Relief To Protect Investors 

On October 30, 2013, the Commission awarded a whistleblower $150,000 whose 

tip assisted the SEC in stopping a scheme that was defrauding investors.16 The 

whistleblower in this matter provided significant information that allowed the SEC to 

quickly open an investigation and to obtain emergency relief before additional investors 

were harmed. 

Additional Payments 

During Fiscal Year 2014, there were several sizeable additional payments made to 

individuals who had received awards in previous fiscal years. In addition to receiving an 

award based on the amount collected in the SEC action or related action, an individual 

who receives a whistleblower award is entitled to receive future payouts to the extent 

the SEC or criminal authorities collect additional amounts. 

On August 21, 2012, the Commission announced its first award payment of nearly 

$50,000, representing 30% of amounts recovered by the agency at that point in time, 

to a whistleblower who provided information that helped halt a multi-million dollar 

fraud.17 On April 4, 2014, the Commission announced that this individual would 

receive an additional $150,000 payout after the SEC collected additional funds from 

one of the defendants in the case. Because of further collection efforts by the agency, this 

whistleblower’s total payment amount currently exceeds $385,000, more than seven 

times the original payment amount. 

Similarly, because of additional amounts collected by the Commission, the whistleblower who received over $14 million in September 2013 received another payout 

exceeding $140,000 during Fiscal Year 2014. Smaller payments also were made to 

certain other whistleblowers who received awards in prior fiscal years as the result of 

further collections by the agency in those matters. 

14 See Order Determining Award Claim, SEC Rel. No. 72652, File No. 2014-6 (July 22, 2014). 

15 See Order Determining Award Claim, SEC Rel. No. 72301, File No. 2014-5 (June 3, 2014). 

16 See Order Determining Award Claim, SEC Rel. No. 70775, File No. 2014-2 (Oct. 30, 2013). 

17 See Order Determining Award Claim, SEC Rel. No. 67698, File No. 2012-1 (Aug. 21, 2012). 
 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 13 

Process for Reviewing Applications for Awards 

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 

$1,000,000.18 During Fiscal Year 2014, OWB posted 139 NoCAs, and since the 

program’s inception, has posted 570 NoCAs, to its website. 

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

and sends email alerts to GovDelivery when its website is updated.19 In addition, 

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

on OWB’s website is updated. Once a NoCA is posted, individuals have 90 calendar 

days to apply for an award by submitting a completed Form WB-APP to OWB by the 

claim due date listed for that action.20 

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 or documents the claimant may have submitted to the Commission. 

OWB works closely with Enforcement staff responsible for the relevant action, as 

well as other Commission staff that may have had interaction 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 as to whether the applicant should receive an award, and if so, 

the percentage of the award. The Office builds a comprehensive record to support 

its recommendation, which may include declarations from Enforcement or other 

Commission staff. 

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

recommendation in accordance with the criteria set forth in the Dodd-Frank Act and 

the Final Rules. The Claims Review Staff currently is comprised of five senior officers 

in Enforcement, including the Director of Enforcement. The Claims Review Staff 

then issues a Preliminary Determination setting forth its assessment as to whether the 

claim should be allowed or denied and, if allowed, setting forth the proposed award 

percentage amount.21 

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

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

Order of the Commission. However, an applicant can submit a written request within 

30 calendar days for a copy of the record that formed the basis of the Claims Review 

18 OWB posts a NoCA for every enforcement action that results in monetary sanctions exceeding $1,000,000. 

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

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

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

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

20 240 C.F.R. §§ 21F-10(a), (b).
 

21 240 C.F.R. § 21F-10(d).
 

“During Fiscal 

Year 2014, OWB 

posted 139 

NoCAs, and since 

the program’s 

inception, has 

posted 570 NoCAs, 

to its website.” 
 

 

 

 

14 | U .S . SECURITIES AND EXCHANGE COMMISSION 

Staff’s decision. Whistleblowers also can seek reconsideration with OWB by submitting 

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

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

whistleblower’s review.22 After considering any requests for reconsideration, the Claims 

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

Commission for its decision.23 

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

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

Determinations irrespective of whether the applicant objected to the Preliminary 

Determination.24 

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

Commissioner may request that the Proposed Final Determination be reviewed by the 

Commission. If no Commissioner requests such a review within the 30-day period, then 

the Proposed Final Determination becomes the Final Order of the Commission. In the 

event a Commissioner requests a review, the Commission reviews the record that the 

Claims Review Staff relied upon in making its determination and issues its Final Order.25 

All Final Orders of the Commission are posted to OWB’s website. The Final Orders 

made publicly available on OWB’s website are redacted to protect the confidentiality of 

the award applicant. 

Curbing Abuses in the Program 

On May 12, 2014, a Final Order of the Commission was issued denying an individual’s 

claims for award in connection with 143 different NoCAs.26 The Order found that 

the individual was ineligible for an award in those matters or in any future covered or 

related action. The Commission previously denied 53 claims for awards submitted by 

this individual. 

Over the course of several years, this individual submitted TCRs, WB-APPs, and other 

communications with Commission officials that contained patently false or fictitious 

statements. OWB engaged in numerous communications with the individual to explain 

the rules governing the whistleblower program, the deficiencies of this individual’s WBAPP submissions, and gave this individual the opportunity to take corrective action. 

OWB informed the individual that a factual nexus must exist between the tip submitted 

and the Notice of Covered Action for which the application for award was based. OWB 

made clear to this individual that repeatedly filing claims for whistleblower awards that 

have no relation to the facts in the underlying matter will not result in an award under 

the whistleblower program. Despite OWB’s admonitions, this individual continued to 

submit frivolous and unsupported claims for awards. 

22 240 C.F.R. § 21F-10(e).
 

23 240 C.F.R. §§ 21F-10(g),(h).
 

24 240 C.F.R. §§ 21F-10(f),(h).
 

25 240 C.F.R. § 21F-10(h). A whistleblower’s rights of appeal from a Commission Final Order are set forth in 


Section 21F(f) of the Exchange Act, 15 U.S.C. § 78u-6(f), and Rule 21F-13(a) of the Final Rules, 240 C.F.R. 

§ 21F-13(a). 

26 See Final Order (May 12, 2014), available at http://www.sec.gov/about/offices/owb/owb-final-orders.shtml. 
DODD-FRANK WHISTLEBLOWER PROGRAM | 15 

This individual’s submission of false and baseless claims for awards harmed the rights 

of legitimate whistleblowers and hindered the Commission’s implementation of the 

whistleblower program by, among other things, delaying the Commission’s ability 

to finalize meritorious awards to other claimants. This individual’s submission of 

frivolous claims also consumed valuable staff resources. The Final Order found that 

this individual’s knowing and willful state of mind in making these statements was 

evidenced by the vague, unsupported, and utterly incredible nature of the statements, 

the individual’s continued submission of claim applications that lacked any factual 

nexus to the covered actions, and the individual’s persistent refusal to withdraw 

numerous unsupported claims or to change behavior in spite of repeated requests 

and explanations by OWB. For these reasons, not only did the Commission deny this 

individual’s claims for awards in connection with 196 actions, but also found this 

individual ineligible for any future award consideration.27 

Claim Denials 

In addition to denying the 196 claims for awards submitted by one individual, 

the Commission also has issued Final Orders denying 19 claims for whistleblower 

awards submitted by other individuals, with 12 of those denials being issued during 

Fiscal Year 2014.28 

Claims for awards have been denied on a number of different grounds. The three 

primary reasons cited in the Final Orders for why a claim was denied include the 

following: (1) the claimant’s information was not “original” information because it was 

not provided to the Commission for the first time after July 21, 2010; (2) the claimant 

failed to submit his or her application for award within 90 calendar days of the 

posting of the NoCA; and (3) the claimant’s information did not lead to the successful 

enforcement action because it did not cause Enforcement staff to open the investigation 

or significantly contribute to the success of the action. OWB anticipates that as we move 

further from July 21, 2010 (the date the Dodd-Frank Act was signed into law) there will 

be fewer claims denied on the basis that the information does not qualify as “original” 

information because it was not provided for the first time after that date. 

27 See Rule 21F-8(c)(7) (providing that an individual is not eligible for a whistleblower award if, in connection 

with a whistleblower submission or other dealings with the Commission, the individual knowingly and 

willfully makes any false, fictitious, or fraudulent statement or representation with intent to mislead or 

otherwise hinder the Commission or another authority). 

28 See Final Orders of the Commission, available at http://www.sec.gov/about/offices/owb/owb-final-orders. 

shtml. 
16 | U .S . SECURITIES AND EXCHANGE COMMISSION 

“The Office 

views protecting 

whistleblower 

confidentiality 

as an integral 

component of the 

whistleblower 

program.” 

PROFILES OF WHISTLEBLOWER AWARD 

RECIPIENTS 

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

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

subject to certain exceptions. The Office views protecting whistleblower confidentiality 

as 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. In some cases, this may 

include redacting the caption of the enforcement action upon which the award is based. 

Consistent with our practice of maintaining whistleblower confidentiality as provided 

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

following 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. 

There are commonalities among 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 pointed to 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. The alleged misconduct was 

relatively current or ongoing. Because of the specific, credible, and timely nature of 

their tips, their information was forwarded to Enforcement staff, who followed up 

by contacting the whistleblowers. These whistleblowers then provided additional 

information or assistance to the staff during the course of the investigation. 

Although there is no requirement under the whistleblower rules that an individual be 

a current or former employee to be eligible for an award, several of the individuals 

who have received awards to date were company insiders. To date, over 40% of 

the individuals who received awards were current or former company employees. 

Furthermore, an additional 20% of the award recipients were contractors, consultants, 

or were solicited to act as consultants for the company committing the securities 

violation. 

Of the award recipients who were current or former employees, over 80% raised their 

concerns internally to their supervisors or compliance personnel before reporting their 

information of wrongdoing to the Commission. In these instances, the individuals 

reported information concerning possible securities violations to the Commission only 

after reporting the information internally and understood that the entity was not taking 

steps to address or remedy the violative conduct. 

Individuals may obtain information of possible wrongdoing through other channels. 

The remaining award recipients obtained their information because they were investors 

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

industry, or had a personal relationship with one of the defendants. 
DODD-FRANK WHISTLEBLOWER PROGRAM | 17 

There is no requirement that an individual be represented by counsel when submitting 

information to the Commission, unless the whistleblower chooses to submit the 

information anonymously. A majority of the award recipients were not represented by 

counsel when they submitted their tip or complaint to the Commission. On the other 

hand, the majority of award recipients were represented by counsel when they applied 

for an award. 

If represented by counsel, a whistleblower may choose to submit his or her tip 

anonymously to the Commission. However, only one of the fourteen award recipients 

to date submitted the information anonymously. Whistleblowers must subsequently 

identify themselves when they apply for an award to allow OWB to assess whether they 

satisfy the criteria for receiving an award under the whistleblower rules. Even at the 

time of an award, however, their identity is not made available to the public. 

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

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

number of the award recipients reported information to the Commission concerning 

ongoing Ponzi schemes, which enabled the Commission to quickly halt the fraudulent 

scheme and protect investors from further harm. Other award recipients provided tips 

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

memorandum or marketing materials or false pricing information, among other types of 

allegations. 

Under the whistleblower rules, individuals are permitted to jointly submit a tip to the 

Commission. Three of our cases in which an award payment was made involved two or 

more whistleblowers jointly submitting information and materials to the Commission. 

In these cases, each whistleblower received a percentage of the amounts collected in the 

SEC enforcement action or related action, based on his or her level of contribution and 

assistance to the case. 

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

monetary judgments over $1,000,000 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 

other actions. 

The award recipients hail from several different parts of the country, and certain of the 

award recipients are foreign nationals who reside outside of the United States. 
18 | U .S . SECURITIES AND EXCHANGE COMMISSION 

“On June 16, 

2014, the SEC 

exercised its 

anti-retaliation 

authority for the 

first time...” 

EFFORTS AT COMBATTING RETALIATION 

SEC’s First Anti-Retaliation Case 

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

Act, prohibits employers from retaliating against individuals in the terms and conditions 

of their employment when they engage in whistleblowing activities. Rule 21F-2(b)(2) 

under the Exchange Act provides that Section 21F(h)(1) is enforceable in an action or 

proceeding brought by the Commission.29 This rule reflects the fact that the Commission 

has general enforcement authority over any violation of the Exchange Act. 

On June 16, 2014, the SEC exercised its anti-retaliation authority for the first time and 

charged hedge fund advisory firm Paradigm Capital Management, Inc. (“Paradigm”) 

with retaliating against an employee for reporting prohibited principal transactions to 

the Commission.30 Paradigm and the firm’s owner, Candace King Weir, agreed to pay 

$2.2 million to settle the Commission’s charges, including for the firm’s violation of 

Section 21F(h)(1). 

According to the SEC’s order, Paradigm’s head trader reported trading activity to the 

Commission revealing that Paradigm engaged in prohibited principal transactions with 

an affiliated broker-dealer without providing effective disclosure or consent from a hedge 

fund client advised by Paradigm. After being notified of the report to the SEC by the 

head trader, Paradigm immediately engaged in a series of retaliatory actions. Paradigm 

removed the whistleblower from the head trader position, tasked the whistleblower with 

investigating the very conduct that had been reported to the SEC while blocking access 

to any meaningful resources to do so, changed the whistleblower’s job function from 

head trader to a full-time compliance assistant, and stripped the whistleblower of 

supervisory responsibilities. The series of retaliatory actions ultimately resulted in the 

whistleblower’s resignation. 

The Commission’s action against Paradigm illustrates that, under Section 21F(h)(1), 

unlawful retaliation does not require that an employee be terminated. Rather, any 

retaliatory action, including demoting, suspending, threatening, or harassing an employee 

for engaging in protected whistleblowing activity, may be actionable. In the Paradigm 

matter, the whistleblower was not terminated and the compensation structure remained 

the same. 

Amicus Curiae Briefs 

An important aspect of the Commission’s whistleblower program is ensuring that, to 

the fullest extent the law permits, individuals are protected from employment retaliation 

when they report potential securities law violations. In the Dodd-Frank Act, Congress 

expressly prohibited employment retaliation against individuals for reporting securities 

law violations and provided that individuals who have experienced such retaliation may 

pursue a private cause of action in the federal courts. 

29 240 C.F.R. § 21F-2(b)(2). 

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

No. 3-15930 (June 16, 2014). 
 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 19 

Several courts have interpreted the statutory language in an unduly narrow manner 

that limits employment retaliation protection only to those individuals who report 

securities law violations directly to the Commission.31 The SEC has consistently 

disagreed with this narrow interpretation. Indeed, when it issued the Final Rules 

under the whistleblower program in 2011, the Commission included a rule to clarify 

that the Dodd-Frank employment retaliation protections apply not just to individuals 

who report to the SEC but also to individuals when they, among other things, report 

potential securities law violations internally at public companies.32 

Since the SEC adopted this rule, disagreement over how to properly interpret the DoddFrank employment retaliation provisions has continued to arise in private cases in the 

federal courts. In several of these cases, the SEC over the past year has filed amicus 

curiae briefs to urge the courts to defer to the SEC’s rule and to 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.33 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 if they report internally they will be 

less likely to do so, which could undermine the important role that public companies’ 

internal compliance programs play in helping the Commission prevent, detect, and stop 

securities law violations. The only court to rule on the issue briefed by the Commission 

agreed with the agency that internal reports can be protected.34 

In addition, the Commission joined in the amicus brief of the United States in a case 

where the Supreme Court, on March 4, 2014, held that the Sarbanes-Oxley’s antiretaliation protections are not limited to employees of publicly-traded companies, 

but also extend to employees of contractors to the companies.35 As the Dodd-Frank 

employment retaliation protections extend to reports protected under Sarbanes-Oxley,36 

the Supreme Court’s ruling means that employees of contractors to publicly-traded 

companies—such as employees of outside counsel or accountants or of investment 

advisers to mutual funds—are likewise protected under the Dodd-Frank Act. 

31 See, e.g., Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013). 

32 240 C.F.R. § 21F-2(b)(1). The anti-retaliation protections apply whether or not the individual satisfies the 

requirements to qualify for an award. Id. § 21F-2(b)(1)(ii). 

33 See, e.g., Liu Meng-Lin v. Siemens AG, 13-4385 (2d Cir. 2013); Lutzeier v. CitiGroup, Inc., 14-cv-00183 

(E.D. Mo. 2014); Doe v. Oppenheimer Asset Mgmt., Inc., 14-cv-00779 (S.D.N.Y. 2014); Peters v. LifeLock, 

Inc., 14-cv-00576 (D. Ariz. 2014). 

34 See Peters v. LifeLock, Inc., Order at 6-13 (Sept. 19, 2014). 

35 See Lawson v. FMR LLC, 134 S.Ct. 1158 (2014). 

36 See 15 U.S.C. 78u-6(h)(1)(A)(iii). 
 

 

20 | U .S . SECURITIES AND EXCHANGE COMMISSION 

WHISTLEBLOWER TIPS RECEIVED 

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

program must submit their tip via the Commission’s online TCR questionnaire portal 

or by mailing or faxing their tip on Form TCR to OWB.37 Whistleblowers who use 

the online portal to submit a complaint receive a simultaneous computer-generated 

confirmation receipt with a TCR submission number. For those who submit their tips 

and complaints via mail or fax, OWB sends an acknowledgement letter, which includes 

a TCR submission number, or a deficiency letter. 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. 

Increase in Whistleblower Tips 

For each 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 10,193 whistleblower tips, and in Fiscal Year 2014 

alone, received 3,620 whistleblower TCRs.38 

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

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

FY201139 FY2012 FY2013 FY2014 

334 3,001 3,238 3,620 

As reflected in the table, the number of whistleblower tips received by the Commission 

has increased each year the program has been in operation. From Fiscal Year 2012, 

the first year for which we have full-year data, to Fiscal Year 2014, the number of 

whistleblower tips received by the Commission 

has grown more than 20%. 

The graphic shows by percentage the number 

of whistleblower tips the Commission received 

on a monthly basis during Fiscal Year 2014. 

As reflected in the chart, the volume of tips 

remained relatively steady throughout the year, 

with the highest number of whistleblower tips 

being received during the months of March 

and April. 

SEP. OCT.

8% NOV.

7%

DEC.

JUL. 7%

9%

JAN.

7%

FEB.

7% MAR. 9% APR. 10%

8%

10%

MAY

JUN.

9%

AUG.

9%

37 240 C.F.R. § 21F-9(a). 

38 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. 

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

for Fiscal Year 2011. 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 21 

Whistleblower Allegation Type 

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

whistleblowers are asked to identify the nature of their complaint allegations. For 

Fiscal Year 2014, the most common complaint categories reported by whistleblowers 

included Corporate Disclosures and Financials (16.9%), Offering Fraud (16%), and 

Manipulation (15.5%).40 

The chart below reflects the number of whistleblower tips received in Fiscal Year 

2014 by allegation type.41 

0

50

100

150

250

300

QUARTER 1 

QUARTER 2 

QUARTER 3 

QUARTER 4 

200

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

Disclosures Fraud Trading Pricing Offerings Event Securities and 

and Financials Public Pension 

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

whistleblower’s own characterization of the violation type. 

41 The category of “other” indicates that the submitter has identified their WB TCR as not fitting into any 

allegation category that is listed on the questionnaire. 
22 | U .S . SECURITIES AND EXCHANGE COMMISSION 

The type of securities violation reported by whistleblowers has remained generally 

consistent over the last three 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 

provides a comparison between the number of whistleblower tips by allegation type 

that the Commission received during the 2012, 2013, and 2014 fiscal years. 

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 Fiscal Year 2014, the Commission received whistleblower submissions 

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

the U.S. territory of Puerto Rico, as reflected in the map below. California, Florida, 

New York, and Texas were the top states from which the highest number of 

whistleblower tips originated in the 2014 fiscal year. 

FREQUENCY

0–20

21–40

41–60

61–100

>101
DODD-FRANK WHISTLEBLOWER PROGRAM | 23 

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

whistleblower tips from individuals in 83 countries outside the United States. In 

Fiscal Year 2014 alone, the Commission received whistleblower submissions from 

individuals in 60 foreign countries. After the United States, OWB received the 

highest number of whistleblower tips in Fiscal Year 2014 from individuals in the 

United Kingdom, India, Canada, the People’s Republic of China, and Australia. 

The map below reflects all countries in which whistleblower tips originated during 

Fiscal Year 2014. 

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

information concerning the sources of domestic and foreign whistleblower tips 

that the Commission received during the 2014 fiscal year. 
24 | U .S . SECURITIES AND EXCHANGE COMMISSION 

PROCESSING OF WHISTLEBLOWER TIPS 

The Commission’s Office of Market Intelligence (“OMI”) evaluates incoming 

whistleblower TCRs and assigns specific, credible, and timely TCRs to members of 

Commission staff for further investigation or analysis. 

TCR Evaluation 

OMI reviews every TCR submitted by a whistleblower to the Commission. During 

the evaluation process, OMI staff examines each tip to identify those with high-quality 

information that warrant the additional allocation of Commission resources. When 

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

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

an Enforcement Associate Director in the Home Office. Complaints that relate to an 

existing investigation are forwarded to the staff working on the matter. Tips that could 

benefit from the specific expertise of another Division or Office within the Commission 

generally are forwarded to staff in that Division or Office for further analysis. 

The Commission may use information from whistleblower tips and complaints in 

several different ways. For example, the Commission may initiate an enforcement 

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

tip does not cause an investigation to be opened, it may still help lead to a successful 

enforcement action if the whistleblower provides additional information that 

substantially contributes to an ongoing or active investigation. Tips also may prompt 

the Commission to commence an examination of a regulated entity or a review of 

securities filings, 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 600 

matters in which a whistleblower’s tip has caused a Matter Under Inquiry (“MUI”) 

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 $1,000,000 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 Enforcement 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 more likely not 

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 this occurs, 

we refer the tip to the other agency in accordance with our confidentiality requirements 

under the statute. 
DODD-FRANK WHISTLEBLOWER PROGRAM | 25 

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 via mail or fax, OWB 

enters this information into the TCR System so it can be evaluated by OMI.42 During 

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

additional information to help in the triage process. 

During an investigation, OWB serves as a liaison between the whistleblower (and 

his or her counsel) and SEC investigative staff. OWB occasionally arranges meetings 

between whistleblowers and the subject matter experts in Enforcement to assist in 

better understanding the whistleblower’s submissions and developing the facts of 

specific cases. OWB staff also communicates frequently with Enforcement staff with 

respect to the timely documentation of information regarding the staff’s interactions 

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

assistance provided by whistleblowers as the potential securities law violation is being 

investigated. 

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

questionnaire are automatically forwarded to OMI for evaluation. 
26 | U .S . SECURITIES AND EXCHANGE COMMISSION 

SECURITIES AND EXCHANGE COMMISSION 

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.43 In addition, the Fund is used to finance the operations of the 

suggestion program of the SEC’s Office of Inspector General.44 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.45 

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

to Congress on an annual basis. Below is a chart containing Fund-related information 

for Fiscal Year 2014. 

FY 2014 

Balance of Fund at beginning of fiscal year $439,196,609.36 

Amounts deposited into or credited to Fund during fiscal year $0.0046 

Amount of earnings on investments during fiscal year $579,107.90 

Amount paid from Fund during fiscal year to whistleblowers ($1,932,863.92)47 

Amount disbursed to Office of the Inspector General during 

fiscal year 

($47,078.42) 

Balance of Fund at end of the fiscal year $437,795,774.92 

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

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

statement, and cash flow analysis. That information is included in the Commission’s 

Agency Financial Report, which will be submitted separately to Congress. 

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

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

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

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

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

provides that the “activities of the Inspector General under this subsection shall be funded by the Securities 

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

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

46 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. 

47 Certain of the whistleblower awards authorized by the Commission during Fiscal Year 2014 were paid after 

September 30, 2014. As such, any payments made after the close of the fiscal year are not reflected in the 

above chart. 
 

1000

900

800

700

600

500

400

300

200

100

2012

2013

547

557

465

553

457

525

703

764

190 196

144

168

115

149

100 105

85 89

64

48

131

84

2014

610

581

563

256

144

159

102

139

58

911

97

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

Disclosures Fraud Trading Pricing Offerings Event Securities and 

and Financials Public Pension 

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

0

DODD-FRANK WHISTLEBLOWER PROGRAM | 27 

APPENDIX A
 

WHISTLEBLOWER TIPS BY ALLEGATION TYPE
 

COMPARISON OF FISCAL YEARS 2012, 2013 AND 2014
 
APPENDIX B

Whistleblower Tips Received by Geographic Location 

United States and its Territories

Fiscal Year 2014

28 | U .S . SECURITIES AND EXCHANGE COMMISSION 

APPENDIX B
 

WHISTLEBLOWER TIPS RECEIVED BY GEOGRAPHIC LOCATION
 

UNITED STATES AND ITS TERRITORIES
 

FISCAL YEAR 2014*
 

AK
 

AL
 

AR
 

AZ
 

CA
 

CO
 

CT
 

DC
 

DE
 

FL
 

GA
 

HI
 

IA
 

ID
 

IL
 

IN
 

KS
 

KY
 

LA
 

MA
 

MD
 

ME
 

MI
 

MN
 

MO
 

MS
 

MT
 

NC
 

ND
 

NE
 

NH
 

NJ
 

NM
 

NV
 

NY
 

OH
 

OK
 

OR
 

PA
 

PR
 

RI
 

SC
 

SD
 

TN
 

TX
 

UT
 

VA
 

VT
 

WA
 

WI
 

WV
 

WY
 

9

18

8

47

556

73

37

16

5

264

61

7

8

10

79

27

12

30

16

60

50

3

39

75

5

2

68

4

13

10

88

6

55

204

41

13

26

97

5

6

58

3

20

208

33

65

6

77

16

4

2

34

0 50 100 150 200 250 300 350 400 450 500 550 600 

*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 Fiscal Year 2014. 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 

Fiscal Year 2014 was 2683, which constitutes approximately 68.95% of the individuals participating in the Commission’s whistleblower program for this 

period. Additionally, 760 individuals constituting 19.53% of the total number of persons participating in the Commission’s whistleblower program for Fiscal 

Year 2014 submitted WB TCRs without any foreign or domestic geographical categorization or submitted them anonymously through counsel. 
DODD-FRANK WHISTLEBLOWER PROGRAM | 29 

APPENDIX C
 

WHISTLEBLOWER TIPS RECEIVED BY
 

GEOGRAPHIC LOCATION INTERNATIONAL
 

FISCAL YEAR 2014*
 

Argentina 

Australia 

Belgium 

Brazil 

Burkina Faso 

Canada 

China, People’s Republic of 

Colombia 

Costa Rica 

Curaçao 

Democratic Rep. of the Congo 

Denmark 

Dominican Republic 

Ecuador 

Finland 

France 

Germany 

Ghana 

Greece 

Hong Kong 

Hungary 

India 

Indonesia 

Ireland 

Israel 

Italy 

Lebanese Republic 

Malaysia 

Maldives 

Malta 

Mexico 

Monaco 

Netherlands, The 

New Zealand 

Nicaragua 

Nigeria 

Norway 

Pakistan 

Peru 

Philippines 

Poland 

Portugal 

Qatar 

Romania 

Russia 

Saudi Arabia 

Singapore 

Slovakia 

Slovenia 

South Africa 

South Korea 

Spain 

Switzerland 

Taiwan 

Thailand 

Turkey 

Ukraine 

United Arab Emirates 

United Kingdom 

Uzbekistan 

14
 

29
 

2
 

6
 

1
 

58
 

32
 

4
 

1
 

13
 

1
 

1
 

2
 

2
 

2
 

3
 

13
 

1
 

2
 

5
 

2
 

69
 

1
 

4
 

3
 

1
 

1
 

12
 

1
 

1
 

6
 

1
 

3
 

1
 

1
 

1
 

2
 

3
 

1
 

7
 

7
 

2
 

2
 

4
 

10
 

1
 

9
 

1
 

2
 

3
 

2
 

4
 

4
 

1
 

6
 

2
 

1
 

3
 

70
 

1
 

0 10 20 30 40 50 60 70 

Frequency

*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 Fiscal Year 2014. The total number of persons submitting WB TCRs from abroad during Fiscal Year 2014 was 448, which constitutes 

approximately 11.51% of the individuals participating in the Commission’s whistleblower program for this period. 

80