_________________________________________________________________________ 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 97598 / May 26, 2023

WHISTLEBLOWER AWARD PROCEEDING 

File No. 2023-61

_________________________________________________________________________ 

In the Matter of the Claims for an Award 

in connection with 

Redacted

Notice of Covered Action Redacted

ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS 

The Claims Review Staff (“CRS”) issued Preliminary Determinations recommending that 

(“Claimant 1”) receive a whistleblower award of about $2 million, which 

) of the monetary sanctions collected in the Covered Action 

(“Claimant 2”) receive a whistleblower award of about $500,000, 

) of the monetary sanctions collected in the Covered Action. 

represents percent ( 

and that 

which represents percent ( 

Redacted Redacted Redacted ***

*** ***

Claimant 2 has contested the Preliminary Determinations. For the reasons discussed below, the 

CRS’s recommendations are adopted.1

The CRS also preliminarily determined to recommend that the award applications of four other claimants 

be denied. None of these claimants submitted a request for reconsideration and, as such, the Preliminary 

Determinations with respect to their award claims became the Final Order of the Commission, pursuant to Rule 21F10(f). 

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I. Background 

A. The Covered Action 

On the Commission instituted a settled public administrative and ceaseand-desist proceeding against (the “Firm”),

 finding that the Firm violated 

 Specifically, the 

Commission found that, from the 

Firm was 

Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted

e

d

Redacted

The Firm was 

also found to have

 Among other relief, the Firm was ordered to pay 

disgorgement of prejudgment interest and a civil money penalty 

of The amount of the monetary sanctions in the Covered Action has been fully 

Redacted

Redacted Redacted Redacted

collected. 

The Office of the Whistleblower posted a Notice of Covered Action on the Commission’s 

public website inviting claimants to submit whistleblower award applications for the Covered 

Action within 90 days.2 Claimants 1 and 2 filed timely whistleblower award claims. 

B. The Preliminary Determinations 

The CRS issued Preliminary Determinations recommending that Claimant 1 and 2 *** ***

 respectively, of the monetary sanctions collected Redactedreceive whistleblower awards of and 

in the Covered Action. In recommending that Claimant 1 receive larger award 

than Claimant 2, the CRS reasoned that Claimant 1’s information was more important to the 

investigation because Claimant 1’s information was received by the Commission several years 

before Claimant 2’s information. The CRS also recommended that Claimant 2’s award be 

decreased due to unreasonable reporting delay. 

C. Claimant 2’s Response to the Preliminary Determinations 

Claimant 2 makes a number of arguments on reconsideration. First, Claimant 2 contends 

that the CRS failed to properly weigh the value of Claimant 2’s contribution to the investigation 

relative to Claimant 1’s, arguing that much of the information for which the CRS credited 

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

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Claimant 1 was, in actuality, information Claimant 1 had received from Claimant 2.

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 Second, 

Claimant 2 contends that the CRS should have taken into account the fact that Claimant 2 was 

the one who provided certain information to Claimant 1 about

 Third, Claimant 2 appears to dispute the 

Redacted Redacted

CRS’s determination that Claimant 2 unreasonably delayed reporting his/her information to the 

Commission.

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 Fourth, Claimant 2 contends that Claimant 1 did not fully understand all the 

intricacies of and that the CRS should have taken this into 

account in recommending an award percentage. Fifth, Claimant 2 asserts that the Preliminary 

Determination’s award allocation to him/her “underestimated” Claimant 2’s value to the staff as 

a live witness to the events they investigated, Claimant 2’s willingness to testify at trial, and the 

value Claimant 2’s information provided to the staff in its settlement negotiations with the Firm’s 

counsel. 

Redacted

Finally, Claimant 2 asserts that the Preliminary Determination he/she received contained 

redactions which, Claimant 2 believes, would have shown that key evidence credited as having 

been provided to the Commission by Claimant 1 was, in fact, evidence that Claimant 2 had given 

to Claimant 1 with the understanding that Claimant 1 would then forward it to the Commission. 

Claimant 2 argues that these redactions were “inappropriate given the voluntary waiver of 

[Claimant 1] of [his/her] anonymous status generally in the context of being a whistleblower but 

in particular as it pertains to [Claimant 2].” 

II. Analysis 

The record demonstrates that Claimant 1 and Claimant 2 each voluntarily provided 

original information to the Commission that led to the successful enforcement of the Covered 

Action.5 

Redacted

3 Claimant 2 states that “’[b]ut for’ [Claimant 2] giving [Claimant 1] the specific and credible information Redacted

and instructing [Claimant 1] persistently to alert the Commission to for a number of years 

before the investigation was opened, there may well not have been an investigation.” This constitutes, according to 

Claimant 2, “punish[ing] [Claimant 2] unfairly while praising [Claimant 1] who was [Claimant 2]’s proxy, under the 

‘but for’ cause in the opening of the investigation while failing to accord [Claimant 2] the same credit.” 

4 While Claimant 2 does not explicitly state in his/her response that Claimant 2 believed the CRS erred in 

determining that he/she had unreasonably delayed reporting his/her information to the Commission, this argument is 

clearly implied by Claimant 2’s contention that, in the years before Claimant 2 filed his/her own TCR, he/she was 

providing important information to Claimant 1 with the understanding that Claimant 1 would then forward it to the 

Commission. 

5 See Exchange Act Section 21F(b)(1), 15 U.S.C. § 78u-6(b)(1); Exchange Act Rule 21F-3(a), 17 C.F.R. § 

240.21F-3(a). 

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Redacted

Redacted

We adopt the CRS’s recommendations on award allocations. In reaching our award 

determinations, we positively assessed the following facts in support of Claimant 1’s larger 

award: (1) Claimant 1’s tip was the initial source of the underlying investigation; (2) Claimant 

1’s tip

 including at the Firm, that would have been difficult to detect without Claimant 1’s 

information; (3) Claimant 1 provided Enforcement staff with extensive and ongoing assistance 

during the course of the investigation, including identifying witnesses and helping staff 

understand complex fact patterns and issues related to the matters under investigation; (4) the 

Commission used information Claimant 1 provided to devise an investigative plan and to craft its 

initial document requests; (5) Claimant 1 made persistent efforts to remedy the issues, while 

suffering hardships; and (6) Claimant 1 was the main source of information for the investigation 

and an important source of information for the Covered Action. 

Redacted Redacted

Claimant 2 provided important information as a percipient witness which helped 

In assessing Claimant 2’s important, but lesser, contribution to the success of the 

Redacted Redacted Redacted Redacted Redacted

Investigation, the Commission notes that Claimant 2 was the first witness who was able to tell 

the staff that the Firm knew or should have 

known key facts about including that 

 with factual details on those topics that went 

beyond what Claimant 1 had been able to provide. In addition, Claimant 2 provided information 

and documents, participated in staff interviews, and provided clear explanations to the staff 

Redacted

Redacted Redacted Redacted

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regarding the issues that Claimant 2 brought to the staff's attention. Claimant 2's info1mation Red.acttd 

gave the staff a more complete picture ofhow 

Redacted 

which the staff was able to use in settlement 

Redacted . ll l . discussions with the Finn's counsel Fma y, C aunant 2 

Rtdacted 

suffered hardship as a result ofhis/her effo11s to 

Contra1y to what Claimant 2 states in his/her reconsideration response, Claimant 2's 

asse11ion as to the impoliance to the Commission 's investigation ofClaimant 2's info1mation 

Redacted 

about was, m 

fact, considered by the CRS and recognized in the Preliminaiy Dete1mination. Fmiher, there is 

no suppo11 in the record for Claimant 2's asse11ion that, with the exception ofinfo1mation 

Claimant 2 provided to Claimant 1 about Redacted 

Redacted -- a fact which Claimant 1 had acknowledged to the staff -- the 

info1mation Claimant 1 provided to the Commission came originally from info1mation Claimant 

2 had provided to Claimant 1. Indeed, most ofthe doclllllentation Claimant 2 offered to suppo11 

his/her contentions consisted ofemails that Claimant 2 was copied on or fo1wai·ded in which 

Claimant 1 communicated with Commission Redacted staff; emails Claimant 1 wrote to 

Claimant 2 and others discussing Claimant 1's thoughts about, or news concerning, the 

Commission 's ongoing investigation; and Claimant l 's effolis to reach out to others to inquire Red.acttd •

about While the staff acknowledged, as 

Claimant 2 notes, that it did not inquire about what specific infonnation Claimant 2 had given to . Rtdacted Claunant 1 beyond 

R•dac,ed Claimant 2's response does not contain evidence of other specific infonnation 

Claimant 2 gave to Claimant 1. Regarding Claimant 2's asse11ion that Claimant 1 did not fully 

comprehend Redacted when Claimant 1 repo1ied to the Commission, 

this does not change the fact that the Commission first learned about the underlying misconduct 

from Claimant 1 and that it was Claimant 1's tips that caused the Commission to open the 

investigation and info1med the investigation's initial steps. Moreover, Claimant 2's arglllllent 

does not change the fact that Commission staff found Claimant l 's info1mation and assistance 

helpful during the course ofits investigation. 

We also find no merit in Claimant 2's asse 1ion that the redactions made in the 

Preliminary Detennination he/she received may have shown that info1mation the CRS credited 

as having been provided to the Commission by Claimant 1 was, in fact, evidence that Claimant 2 

had given to Claimant 1 with the understanding that Claimant 1 would then fo1wai·d it to the 

Commission. The redacted Preliminary Detennination received by Claimant 2 did not redact any 

info1mation about Claimant 1 other than Claimant l 's name; the balance ofthe redactions 

concerned the other four whistleblowers who did not contest the Preliminaiy Dete1minations. 11 

There is similai·ly no merit in Claimant 2's contention that the redactions made in the 

Preliminary Detennination as to Claimant 1 were improper or inappropriate because Clamant 1 

Redacted 

See supra note 1. 

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had publicly disclosed his/her identity. Regardless of whether a whistleblower chooses to 

publicly disclose his/her identity as a whistleblower, the Commission has a legal obligation 

under Exchange Act Sec. 21F(h)(2) to “not disclose any information, including information 

provided by a whistleblower to the Commission, which could reasonably be expected to reveal 

the identity of a whistleblower,” except in certain limited circumstances not applicable here. 

Thus, the redaction of Claimant 1’s name in Claimant 2’s Preliminary Determination is a 

mandatory requirement under the law, not a discretionary decision by the CRS. 12 

Contrary to Claimant 2’s contention that the award allocation in the Preliminary 

Determination “underestimated” his/her value to the staff as a live witness, Claimant 2’s 

willingness to testify at trial, and the value Claimant 2’s information provided to the staff in its 

settlement negotiations with the Firm’s counsel, our order, in fact, discusses in detail and clearly 

recognizes the value to the Commission of Claimant 2 being a witness to key events and the 

usefulness of his/her information in settlement negotiations. With regard to Claimant 2’s 

contention about the potential but unrealized value of his/her testimony at trial, the 

Commission’s award determinations under Rule 21F-6 are based on whistleblowers’ actual 

contributions, not hypothetical ones. 

for a number of years before the investigation was opened, 

Finally, we note that, in contrast to Claimant 1, who persistently alerted the Commission Redacted

Claimant 2 delayed reporting to the Commission for several years. Redacted RedactedWhile Claimant 2 states that 

he/she was aware as early as ***

Claimant 2 did not report to the Commission until – at least five years after Claimant 2 

was aware of the possible illegal nature of these transactions and four years after Claimant 2 left 

his/her former employer. During this period, the harm continued to investors who were unaware 

of the violative conduct. Accordingly, we find that Claimant 2 unreasonably delayed reporting 

to the Commission and that Claimant 2’s award percentage should be set at 13 Redacted

Claimant 2 also faults Claimant 1 for indicating that Claimant 2 would share in the whistleblower awards 

Claimant 1 expected to receive from the Commission and then not fulfilling his/her commitment to Claimant 2. 

However, Claimant 1’s supposed commitment is irrelevant to our analysis of the respective award percentages that 

each should receive. 

13 In setting the award percentage at we took into consideration certain facts in the record relevant 

to the issue of delay. Although the record demonstrates that Claimant 2 unreasonably delayed, we considered that 

Claimant 2 provided Claimant 1 with information 

knowing that Claimant 1 was forwarding this information to the Commission 

Redacted

Redacted

Redacted

staff. 

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III. Conclusion

Accordingly, it is hereby ORDERED that (1) Claimant 1 receive an award of

percent ( ***

***

percent ( 

***

) of the monetary sanctions collected in the Covered Action; and (2) Claimant 2 

receive an award of ) of the monetary sanctions collected in the Covered Action. 

Redacted

By the Commission. 

J. Lynn Taylor

Assistant Secretary

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