2015 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
 

Process for Reviewing Applications for Awards ............................. 12
 

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

Significant Legal Decision—Award Denial ................................ 15
 

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

Preserving Whistleblowers’ Rights to Report to the Commission
 

and Shielding Whistleblowers from Retaliation . . . . . . . . . . . . . . . . . . . . . . . . . . .19
 

Restrictive Agreements................................................ 19
 

Protection for Internal Reporting ........................................ 19
 

Whistleblower Tips Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
 

Increase in Whistleblower Tips.......................................... 21
 

Whistleblower Allegation Type ......................................... 22
 

Geographic Origin of Whistleblower Tips ................................. 23
 

Processing of Whistleblower Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
 

TCR Evaluation ..................................................... 25
 

Assistance by OWB................................................... 26
 

Securities and Exchange Commission Investor Protection Fund . . . . . . . . . . . . . .27
 

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, 2014, and 2015 . . . . . . . . . . . . . . . . . . .28
 

Fiscal Year 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
 

Fiscal Year 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
 

Report available on the Web at:
 

http://www .sec .gov/about/offices/owb/annual-report-2015 .pdf
 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 1 

MESSAGE FROM THE CHIEF OF THE 

OFFICE OF THE WHISTLEBLOWER 

The Commission has paid more than $54 million to 22 whistleblowers since the 

Commission’s new whistleblower rules went into effect in August 2011 . In Fiscal 

Year 2015 alone, more than $37 million was paid to reward whistleblowers for their 

provision of original information that led to a successful Commission enforcement 

action with monetary sanctions totaling over $1 million . We are honored by Chair 

Mary Jo White’s characterization of the whistleblower program as “a success,” which 

“we will work hard at the SEC to build on” in the coming years .1 

One of the primary activities of the SEC’s Office of the Whistleblower (“OWB” or “the 

Office”) is to evaluate whistleblower award claims and to make recommendations as 

to whether claimants satisfy the eligibility requirements for receiving an award . Since 

the beginning of the program, the Commission and Claims Review Staff have issued 

Final Orders or Preliminary Determinations with respect to over 390 claims for award . 

Although a significant number of claims have been fully resolved by Final Order of the 

Commission or addressed via Preliminary Determination, the number of whistleblower 

award claims received by OWB has continued to increase . In Fiscal Year 2015, OWB 

received more than 120 whistleblower award claims, representing a significant increase 

compared to prior years . We believe this uptick in whistleblower award claims is 

attributable to the increased public awareness of the SEC’s whistleblower program 

and in response to the tens of millions of dollars that have been paid to whistleblowers 

under the program . 

Increased public awareness of the program also has led to a substantial growth in 

the number of whistleblower tips . The number of whistleblower tips received by the 

Commission has increased each year of the program’s operation . In Fiscal Year 2015, 

we received nearly 4,000 whistleblower tips, a 30% increase over the number of tips 

received in Fiscal Year 2012, the first year for which we have full-year data . Many of 

the tips have led staff in the SEC’s Division of Enforcement (“Enforcement”) to open an 

investigation or are being considered in connection with an existing investigation . 

In addition to managing the awards program, OWB is actively involved with 

Enforcement staff in helping to ensure that individuals feel secure in reporting 

wrongdoing to the Commission, without fear of reprisal from their employers . During 

Fiscal Year 2015, the Commission took several important actions aimed at protecting 

whistleblowers from unlawful retaliation by their employers or attempts to interfere 

with their ability to report to, and cooperate with, the agency . 

For the first time, in April 2015, the Commission brought charges under Rule 21F-17(a) 

against a company for including language in confidentiality agreements that impeded 

whistleblowers from reporting to the Commission . Rule 21F-17(a) provides that no 

person may take any action to impede an individual from reporting information about 

wrongdoing to the Commission . This includes, for example, by enforcing or threatening 

“The Commission 

has paid more than 

$54 million to 22 

whistleblowers since 

the Commission’s 

new whistleblower 

rules went into effect 

in August 2011.” 

1 Remarks by Chair Mary Jo White, Ray Garrett, Jr . Corporate and Securities Law Institute-Northwestern 

University School of Law, Chicago, Illinois (April 30, 2015) (hereinafter, “Chair Remarks”) . 
2 | U.S. SECURITIES AND EXCHANGE COMMISSION 

“In Fiscal Year 2015, 

we received nearly 

4,000 whistleblower 

tips, a 30% increase 

over the number of 

tips received in Fiscal 

Year 2012.

”

to enforce a confidentiality agreement with respect to such reporting . The confidentiality 

agreements used by the company in the case prohibited employees from discussing the 

substance of interviews they gave in internal investigations without the approval of the 

company’s legal department . Assessing confidentiality agreements for compliance with 

Rule 21F-17(a) will continue to be a top priority for OWB into Fiscal Year 2016 . 

In issuing the final whistleblower rules, the Commission included a rule to clarify that 

the employment retaliation protections provided by the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (“Dodd-Frank Act” or “Dodd-Frank”) apply not only to 

individuals who report wrongdoing to the SEC but also to employees who, among other 

things, report potential securities law violations internally to their employers . Several 

courts, however, have narrowly interpreted the Dodd-Frank anti-retaliation provisions 

and limited protection only to those individuals who report to the Commission . 

In response, the Commission has filed numerous amicus curiae briefs on this issue 

in federal district court and appeals court matters . In addition, in August 2015, the 

Commission issued interpretive guidance clarifying that the Dodd-Frank anti-retaliation 

provisions apply to individuals who report information of possible securities law 

violations irrespective of whether they report such information internally or to the 

Commission .2

 Most recently, in September 2015, the Second Circuit Court of Appeals 

in Berman v. Neo@Ogilvy LLC, deferred to the agency’s position that employees who 

report securities law violations to their employers, regardless of whether they also 

separately report to the Commission, are protected by the Dodd-Frank anti-retaliation 

provisions . 

In Fiscal Year 2015, the Commission also issued an award of 30%, the statutory 

maximum, to a whistleblower who provided original information that led to the 

Commission’s first successful anti-retaliation enforcement action under the DoddFrank Act . After reporting information of potential wrongdoing to the Commission, 

the whistleblower’s employer engaged in a series of retaliatory behaviors against the 

whistleblower . In authorizing a maximum award, the Commission found its law 

enforcement interest to be compelling given the previous findings of unlawful retaliation 

against the whistleblower . 

These actions reflect the firm position the Commission has taken to protect 

whistleblowers from employment retaliation or actions that impede their ability to 

report to and cooperate with Commission staff . “We want whistleblowers—and 

their employers—to know that employees are free to come forward without fear of 

reprisals .”3 

2 The interpretive guidance can be found on OWB’s webpage at http://www .sec .gov/whistleblower . 

3 Chair Remarks . 
DODD-FRANK WHISTLEBLOWER PROGRAM | 3 

By protecting the confidentiality of individuals who report to the Commission pursuant 

to the whistleblower program, taking action against employers who retaliate against or 

interfere with their employees’ ability to report wrongdoing to the agency, and awarding 

whistleblowers whose information leads to successful enforcement actions, we expect 

that the Commission will continue to receive high-quality tips that can be leveraged to 

detect and halt fraud earlier and more effectively . We anticipate that the whistleblower 

program will continue to be “a game changer”4 in the enforcement of the federal 

securities laws and the protection of investors and the marketplace . 

OWB encourages anyone who believes they have information concerning a potential 

“We want 

whistleblowers—and 

their employers—to 

know that employees 

are free to come 

forward without fear 

of reprisals.” 

securities law violation to submit the tip via the online portal on OWB’s webpage 

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

OWB’s webpage, by mail or fax . If whistleblowers or their counsel have any questions 

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

the Commission, we encourage them to call OWB’s whistleblower hotline at 

(202) 551-4790 . All messages will be returned within 24 business hours . 

Sean X. McKessy 

Chief, Office of the Whistleblower 

November 16, 2015 

4 Id. 
 

 

 

 

 

4 | U.S. SECURITIES AND EXCHANGE COMMISSION 

HISTORY AND PURPOSE 

The Dodd-Frank Act5 amended the Securities Exchange Act of 1934 (the “Exchange 

Act”)6 by, among other things, adding Section 21F,7 entitled “Securities Whistleblower 

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

awards to eligible individuals who voluntarily provide original information that leads 

to successful Commission enforcement actions resulting in monetary sanctions over 

$1 million, and successful related actions .8 

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 the SEC’s Division of 

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 “Whistleblower Rules”)9

 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 .10 

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 .11 

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

activities, whistleblower complaints received, and the response of the Commission 

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

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

subjects: 

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

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

preceding fiscal year; 

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

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

6 15 U .S .C . § 78a et seq.
 

7 Id. § 78u-6 .
 

8 “Related actions” is defined at 17 C .F .R . § 240 .21F-3 .
 

9 Id. §§ 21F-1–21F-17 .
 

10 15 U .S .C . § 78u-6(h)(1); 17 C .F .R . § 240 .21F-2(b) .
 

11 See id. §§ 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 2015, and the processing of those whistleblower tips 

primarily address the requirements of Section 924(d) of the Dodd-Frank Act . The 

sections in this report addressing the Fund and whistleblower incentive awards made 

during Fiscal Year 2015 primarily address the requirements of Section 21F(g)(5) of the 

Exchange Act . 
 

 

6 | U.S. SECURITIES AND EXCHANGE COMMISSION 

“...one area of focus 

for OWB was whether 

employers were 

using confidentiality, 

severance, and other 

kinds of agreements 

to interfere with an 

individual’s ability 

to report potential 

wrongdoing to 

the SEC.

”

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 was staffed during the past fiscal year by ten attorneys,12 five 

paralegals, and an administrative assistant . Two additional attorneys will be joining 

OWB at the beginning of the next fiscal year . Below is an overview of OWB’s primary 

responsibilities and activities over the past fiscal year . 

Assessment of Award Applications 

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

corporate insiders and others with relevant information concerning potential securities 

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

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

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

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

should check to make sure that there is a nexus between the tip he or she provided to 

the Commission and what was ultimately charged in the enforcement matter . 

OWB staff attempts to track investigations where a 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 is 

ultimately a 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 NoCA posting and applicable deadline for 

submitting a claim for award . 

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

and confer with relevant Enforcement or Exam staff to understand in more detail 

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

Claims Review Staff, comprised of five senior members of Enforcement, as to award 

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

Commission, as well as what awards were made during Fiscal Year 2015, please refer to 

pages 10-14 of this report . 

Reviewing Restrictive Agreements 

During Fiscal Year 2015, one area of focus for OWB was whether employers were 

using confidentiality, severance, and other kinds of agreements to interfere with 

an individual’s ability to report potential wrongdoing to the SEC . Exchange Act 

Rule 21F-17(a) provides that “[n]o person may take any action to impede an individual 

from communicating directly with the Commission staff about a possible securities law 

violation, including enforcing, or threatening to enforce, a confidentiality agreement... 

12 One attorney recently joined the Office near the end of Fiscal Year 2015 . 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 7 

with respect to such communications .”13 On April 1, 2015, the Commission brought 

its first enforcement action, against KBR Inc ., finding that restrictive language in 

confidentiality agreements violated this rule .14 OWB continues to actively work with 

Enforcement staff to identify and investigate practices in the use of confidentiality and 

other kinds of agreements that may violate Rule 21F-17(a) . We will continue to focus 

on agreements that have language that reasonably could have the effect of impeding 

whistleblowers from reporting securities violations to the Commission . 

Advancing Anti-Retaliation Protections 

OWB identifies and monitors whistleblower complaints alleging retaliation by 

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

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

authority to enforce all the provisions of the Exchange Act, including the whistleblower 

anti-retaliation protections under the Dodd-Frank Act . As discussed in last year’s report, 

the Commission brought its first anti-retaliation case against an employer in June 2014 . 

OWB continues to work with Enforcement staff on identifying potential anti-retaliation 

enforcement actions . OWB also monitors federal court cases involving the antiretaliation provisions of the Dodd-Frank Act and the Sarbanes-Oxley Act of 2002 .15 

Finally, OWB works with the SEC’s Office of the General Counsel, which has appeared 

in federal courts around the country in support of the Commission’s position that 

the anti-retaliation provisions of the Dodd-Frank Act protect individuals who report 

internally to their companies, as well as those who report directly to the Commission . 

For more information about these activities, please see pages 19-20 . 

Intake of Whistleblower Tips 

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 . Exchange Act Rule 21F-9 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 hard-copy 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 hard 

copy . 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 . For more 

information on the number and types of tips received, please refer to pages 21-24 . 

13 17 C .F .R . § 240 .21F-17(a) .
 

14 For a full discussion of the enforcement action against KBR Inc ., please refer to page 19 .
 

15 18 U .S .C . § 1514A .
 
8 | U.S. SECURITIES AND EXCHANGE COMMISSION 

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 public 

about the whistleblower program . Individuals leave messages on the hotline, which 

are returned by OWB attorneys within 24 business hours . To protect the identity of 

whistleblowers, OWB will not leave return messages unless the caller’s name is clearly 

and fully identified on the caller’s voicemail box . 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 to contact the individual . 

During Fiscal Year 2015, the Office returned over 2,801 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 a whistleblower’s identity; requests for information 

on the investigative process or tracking an individual’s complaint status; or focus on 

whether the SEC is the appropriate agency to handle the caller’s tip . 

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

regularly communicates with whistleblowers who have submitted tips, additional 

information, claims for awards, and other correspondence to OWB . 

“During Fiscal Public Outreach and Education 

Year 2015, the Office	 

returned over 2,801 

phone calls from 

members of 

the public.

”

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

whistleblower program . As part of that outreach effort, the Office has actively 

participated in numerous webinars, media interviews, presentations, press releases, 

and other public communications . By raising awareness of the program, we hope to 

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

discovering and stopping fraudulent schemes early . As more individuals have become 

aware of the program, we have received, in turn, more award claims . 

In Fiscal Year 2015, OWB staff participated in over 20 public engagements aimed 

at promoting and educating the public concerning the Commission’s whistleblower 

program . The Office’s target audience generally includes potential whistleblowers, 

whistleblower counsel, and corporate compliance counsel and professionals . In an effort 

to increase the visibility of the Commission’s whistleblower program, the Office has 

participated on legal panels and in other forums with other federal agencies that have

similar whistleblower programs, including the Department of Labor, the Department of 

Justice, the Commodity Futures Trading Commission, and the Internal Revenue Service . 

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

website (www .sec .gov/whistleblower) . The website includes videos 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 enforcement actions 

for which a claim for award may be made, links to helpful resources, and answers to 

frequently asked questions . 
DODD-FRANK WHISTLEBLOWER PROGRAM | 9 

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 2015, we continued to provide training on the whistleblower 

program for Enforcement staff, both in the Home Office as well as in several of the 

Regional Offices . We educated new Enforcement staff regarding the whistleblower 

program . We also provided whistleblower training to staff in other Divisions and 

Offices who may find themselves on the receiving end of whistleblower information 

during the course of an examination . 
 

 

10 | U.S. SECURITIES AND EXCHANGE COMMISSION 

CLAIMS FOR WHISTLEBLOWER AWARDS 

Whistleblower Awards 

During Fiscal Year 2015, the Commission and Claims Review Staff issued Final Orders 

or Preliminary Determinations addressing over 150 whistleblower award claims . Final 

Orders or Preliminary Determinations have been issued for more than 390 award 

claims since the beginning of the program . 

In Fiscal Year 2015, the Commission paid more than $37 million out of the Investor 

Protection Fund to eight whistleblowers .16 Each of these whistleblowers provided new 

information of which the agency was not aware that either led to the opening of the 

investigation or significantly contributed to the successful enforcement action . Below is 

an overview of each of those awards . 

“Final Orders Over $30 Million Paid to One Whistleblower 

or Preliminary 

Determinations	

have been issued 

for more than 390 

award claims since 

the beginning of the	

program.”

As discussed in last year’s report, in September 2014, the Commission authorized an 

award of more than $30 million to a whistleblower who provided original information

that led to a successful enforcement action .17 This award represented the Commission’s 

highest award to date under the whistleblower program . 

Although the Commission’s Final Order approving the award was issued near the 

end of Fiscal Year 2014, the actual payment of the award to this whistleblower from 

the Investor Protection Fund occurred at the beginning of Fiscal Year 2015 . The 

whistleblower’s information also led to successful related actions, and the whistleblower 

received additional payments during Fiscal Year 2015 based on amounts collected in 

those related actions . 

Maximum Award for Whistleblower in First Anti-Retaliation Case 

On April 28, 2015, the Commission announced a maximum whistleblower award

payment of 30% of amounts collected in connection with In the Matter of Paradigm 

Capital Management, Inc. and Candace King Weir, File No . 3-15930 (June 16, 2014), 

the Commission’s first anti-retaliation case .18 The whistleblower received over $600,000 

for providing key original information that led to the success of the Commission action . 

In determining the award percentage, the Commission considered the substantial 

evidence that the whistleblower suffered unique hardships as a result of reporting, and 

also found its law enforcement interest to be compelling given the previous findings of 

unlawful retaliation against the whistleblower . 

The Commission charged Paradigm with retaliating against the whistleblower after the 

firm learned that the whistleblower reported potential misconduct to the Commission . 

According to the Commission’s Order, Paradigm immediately engaged in a series of 

retaliatory actions against the whistleblower including removing the whistleblower from 

the whistleblower’s then-current position, tasking the whistleblower with investigating 

the very conduct the whistleblower reported to the Commission, changing the 

16 After the close of Fiscal Year 2015, but before the filing of this annual report, the Commission issued a 

Final Order authorizing another whistleblower award of over $325,000 . To date, 22 individuals have 

received awards under the program . 

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

18	 See Order Determining Award Claim, Exchange Act Rel . No . 74826, File No . 2015-4 (Apr . 28, 2015) . The 

name of the case was included in the Final Order and accompanying press release because such information 

was already in the public domain in light of the earlier enforcement action in this matter . 
 

 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 11 

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

and otherwise marginalizing the whistleblower .19 

Substantial Harm Exception Paves Way for Award to 

Compliance Professional 

On April 22, 2015, the Commission awarded more than a million dollars to a 

compliance professional who provided information that assisted the Commission in an 

enforcement action against the whistleblower’s company .20 

Individuals whose principal duties involve compliance or internal audit responsibilities 

generally are excluded from award eligibility unless an exception applies . Here, 

the Commission determined the whistleblower’s information was still “original 

information” under the Whistleblower Rules because the whistleblower “had a 

reasonable basis to believe that disclosure of the information to the Commission [was] 

necessary to prevent the relevant entity from engaging in conduct that [was] likely to 

cause substantial injury to the financial interest or property of the entity or investors .”21 

Although the Commission previously made an award to an individual with compliance 

or internal audit functions pursuant to a different exception, this was the first time the 

Commission utilized the “substantial injury” exception . 

Over $3 Million to Whistleblower Who Provided Information of a 

Complex Fraud 

On July 17, 2015, the Commission announced its third-largest whistleblower award to 

a company insider whose information assisted the Commission in cracking a complex 

fraudulent scheme and also led to related actions .22 The whistleblower’s information 

was specific and detailed and comprehensively laid out the fraudulent scheme, 

which would have been very difficult to detect in the absence of the whistleblower’s 

information . The whistleblower received an award exceeding $3 million . 

Former Company Officer Receives Award After Company Fails 

to Take Action 

On March 2, 2015, the Commission made a half-million dollar award to a former 

company officer who reported original, high-quality information about a securities 

violation that resulted in a Commission enforcement action with sanctions exceeding 

$1 million .23 

Officers, directors, trustees, or partners who learn about a fraud through another 

employee reporting the misconduct generally are not eligible for an award under 

the Commission’s whistleblower program . However, there is an exception in the 

Whistleblower Rules to this exclusion that makes an officer eligible if he or she reports 

the information to the Commission more than 120 days after other responsible 

compliance personnel possessed the information and failed to adequately address the 

issue . This award was the first Commission whistleblower award to an officer under 

these circumstances . 

19 See In the Matter of Paradigm Capital Mgmt., Inc. and Candace King Weir, Exchange Act Rel . No . 72393, 

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

20 See Order Determining Award Claim, Exchange Act Rel . No . 74781, File No . 2015-2 (Apr . 22, 2015) . 

21 Id. at n .1, citing 17 C .F .R . § 240 .21F-4(b)(4)(v)(A) . 

22 See Order Determining Award Claim, Exchange Act Rel . No . 75477, File No . 2015-5 (July 17, 2015) . 

23 See Order Determining Award Claim, Exchange Act Rel . No . 74404, File No . 2015-1 (Mar . 2, 2015) . 
 

 

 

12 | U.S. SECURITIES AND EXCHANGE COMMISSION 

Award to Foreign Nationals Who Jointly Reported Information 

On September 28, 2015, the Commission issued an award of 20% to two foreign 

nationals who jointly reported information that caused Enforcement staff to open the 

investigation in the underlying action .24 One claimant received an award of 11% while 

the other claimant received an award of 9%, based on the level of assistance each 

provided to Commission staff . The Commission has made awards in three other matters 

where two or more individuals provided their information jointly to the Commission . 

Additionally, this is the third matter in which the Commission has made an award to a 

whistleblower living or residing outside of the United States, demonstrating the global 

scope of the agency’s whistleblower program . 

Near Maximum Award to Whistleblower 

On September 29, 2015, the Commission issued a Final Order authorizing an award of 

28% to a whistleblower who voluntarily provided original information to the agency 

that led to the successful enforcement of the underlying covered action .25 

Most recently, on November 4, 2015, the Commission issued a Final Order authorizing 

an award payment of over $325,000 to a whistleblower who provided detailed 

information that caused Enforcement staff to open the investigation in the underlying 

action .26 This most recent award, which occurred after the close of the Fiscal Year, but 

before the date of this report, brings the total number of whistleblowers receiving an 

award under the Commission’s whistleblower program to 22 . 

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 million .27 During Fiscal Year 2015, OWB posted 139 NoCAs, and since 

the program’s inception, has posted 709 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 the NoCA listing is updated .28 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 .29 

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

prior correspondence between the claimant and the Commission and analyzing 

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

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

24 See Order Determining Award Claim, Exchange Act Rel . No . 76000, File No . 2015-7 (Sept . 28, 2015) . 

25 See Order Determining Award Claim, Exchange Act Rel . No . 76025, File No . 2015-8 (Sept . 29, 2015) . 

26 See Order Determining Award Claim, Exchange Act Rel . No . 76338, File No . 2016-1 (Nov . 4, 2015) . 

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

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

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

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

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

29 17 C .F .R . §§ 240 .21F-10(a), (b) . 
 

 

 

 

 

 

 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 13 

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 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 Whistleblower 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 of whether the 

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

percentage amount .30 

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 Staff’s 

decision . As a precondition to receiving a copy of the record, OWB requires claimants 

and their counsel, if represented, to execute a standard confidentiality agreement 

limiting the use of such materials to the claims review process .31 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) if the record 

was requested, the date when OWB made the record available for the whistleblower’s 

review .32 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 .33 

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

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

Determinations irrespective of whether the applicant objected to the Preliminary 

Determination .34 

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 .35 

30 Id. § 21F-10(d) . 

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

agreement, as set forth in § 240 .21F-(8)(b)(4) of this chapter, before providing [Preliminary Determination] 

materials .” 

32 17 C .F .R . § 240 .21F-10(e) . 

33 Id . §§ 21F-10(g), (h) . 

34 Id. §§ 21F-10(f), (h) . 

35	 Id. § 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 Whistleblower Rules, 

17 C .F .R . § 240 .21F-13(a) . 
 

 

 

14 | U.S. SECURITIES AND EXCHANGE COMMISSION 

Because of the built-in time periods required under the Whistleblower Rules discussed 

above, there is a minimum of seven months between when a claimant may submit 

his or her application for award and when a final determination may be made with 

respect to that claim if an applicant exercises his or her reconsideration and appeal 

rights . Furthermore, several of the recent award determinations involved novel legal 

issues . For instance, one issue of first impression related to the circumstances under 

which officers and directors and compliance and internal audit personnel may be 

eligible for whistleblower awards . Consideration of these novel legal issues increases 

the time it takes to process a claim . The number of claimants applying for an award in 

connection with a covered action also affects the time it takes to process a claim, and 

the submission of a frivolous claim may delay the issuance of an award to a legitimate 

claimant . 

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 . 

“...there is a Curbing Abuses in the Program 

minimum of seven	

months between 

when a claimant may 

submit his or her 

application for award	

and when a final	

determination may


be made...

”

As discussed in last year’s Annual Report, on May 12, 2014, a Final Order of the 

Commission was issued denying an individual’s claims for awards in connection with 

143 different NoCAs .36 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 . 

On August 5, 2015, a Final Order of the Commission was issued denying another 

individual’s claims in connection with 25 NoCAs and also finding the claimant 

ineligible for an award in any other pending or future covered or related actions .37 The 

claimant knowingly and willfully made false, fictitious, and fraudulent statements and 

representations to the Commission over the course of several years .38 This individual’s 

claims for award failed to include even a remote factual nexus to the covered actions for 

which the individual applied . OWB staff repeatedly explained to the claimant the rules 

governing the whistleblower program and the deficiencies of the claimant’s submissions . 

The claimant, however, refused to withdraw any of the award claims . Further, the 

claimant’s submission of frivolous claims 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 and consuming significant staff resources . 


 

36 See Final Order (May 12, 2014), available at http://www .sec .gov/about/offices/owb/owb-final-orders .shtml . 

37 See Final Order (Aug . 5, 2015), available at http://www .sec .gov/about/offices/owb/owb-final-orders .shtml . 

38 See 17 C .F .R . § 240 .21F-8(c)(7) . 
 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 15 

Significant Legal Decision—Award Denial 

In order for a claimant to be eligible for an award, the claimant must have provided 

the Commission with “original information,” which is defined in the Whistleblower 

Rules, in part, as information that is provided to the Commission for the first time after 

July 21, 2010 .39 Therefore, if a claimant provided a tip to the Commission before 

Dodd-Frank’s enactment, the claimant’s information will not satisfy the definition of 

“original information,” and the claim will be denied . 

On March 11, 2015, the Second Circuit Court of Appeals upheld the Commission’s 

denial of an award claim in Stryker v. SEC 40 The Commission had denied the 

claimant’s award application because the claimant’s information that purportedly 

“led to” the success of the enforcement action was provided to the Commission before 

Congress passed the Dodd-Frank Act, which created the whistleblower program . 

In reaching its decision, the Court examined the relevant statutory language and 

concluded that the Commission’s interpretation was reasonable and consistent with the 

Dodd-Frank Act . Ultimately, the Court, applying “Chevron deference,”41 affirmed the 

Commission’s Order denying the award . 

This decision is notable because it was the first and–to date–only judicial opinion to 

address a Commission Final Order denying a whistleblower award claim . 

39 Id. § 21F-4(b)(iv) .
 

40 780 F .3d 163 (2d Cir . 2015) .
 

41 See Chevron, U.S.A. Inc. v. Natural Res. Def. Council, Inc ., 467 U .S . 837, 843 & n .11 (1984) .
 
 

 

16 | U.S. SECURITIES AND EXCHANGE COMMISSION 

“...awards have 

been made to 

22 individuals 

in connection 

with 16 covered 

actions, as well as 

in connection with 

several related 

actions.” 

PROFILES OF WHISTLEBLOWER AWARD 

RECIPIENTS 

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

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

subject to certain exceptions . Protecting whistleblower confidentiality is an integral 

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

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

or denying awards before they are issued publicly . 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 . 

Since the beginning of the whistleblower program, awards have been made to 22 

individuals in connection with 16 covered actions, as well as in connection with several 

related actions . 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 . 

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

to a successful enforcement action, meaning that the original information either caused 

an examination or investigation to open or the original information significantly 

contributed to a successful enforcement action where the matter was already under 

examination or investigation . Roughly one-half of the whistleblowers who have received 

awards under the program provided original information that caused Enforcement staff 

to open an investigation, while the other half received awards because their original 

information significantly contributed to an existing investigation . In assessing whether 

information significantly contributed to an enforcement action, the Commission will 

consider such factors as whether the information allowed the agency to bring the 

action in significantly less time or with fewer resources, additional successful claims, or 

successful claims against additional individuals or entities .42 

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

current or former employee to be eligible for an award . However, to date, almost half of 

the award recipients were current or former employees of the company on which they 

reported information of wrongdoing . Of the award recipients who were current 

42 Securities Whistleblower Incentives and Protections, 76 Fed . Reg . 34,300, 34,325 (June 13, 2011) . 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 17 

or former employees, approximately 80% raised their concerns internally to their 

supervisors or compliance personnel, or understood that their supervisor or relevant 

compliance personnel knew of the violations, before reporting their information of 

wrongdoing to the Commission . 

Individuals may obtain information of possible wrongdoing through other channels . 

The remaining award recipients obtained their information because they were either 

investors who had been victims of the fraud, professionals working in a related industry, 

or had a personal relationship with the alleged wrongdoer . 

A whistleblower may choose to submit his or her tip anonymously to the Commission, 

if represented by counsel . Approximately 20% of the individuals who have received 

awards under the program submitted their information anonymously to the 

Commission through counsel . Certain of those whistleblowers thereafter identified 

themselves to Enforcement staff during the course of the investigations . Whistleblowers 

must 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 or 

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

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

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

offering memoranda or marketing materials, and false pricing information, among other 

types of misconduct . 

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

Commission . Four of the 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 million also may be eligible to receive an award if the 

same information led to a related action, such as a parallel criminal prosecution . Seven 

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 some award 

recipients are foreign nationals residing outside of the United States . 

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

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

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

“Award percentages 

are based on the 

particular facts and 

circumstances of each 

case, and are not 

based on any hardset mathematical 

formula.” 
 

 

 

 

18 | U.S. SECURITIES AND EXCHANGE COMMISSION 

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

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

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

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

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

The absence of any negative factors does not mean that the whistleblower will be 

issued an award at or near the top of the 30% statutory maximum . This is because the 

whistleblower’s level of assistance or the significance of the information may not have 

been that substantial . 

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

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

systems, or unreasonably delayed in reporting the violation to the Commission . To 

date, the Commission has not addressed the first two of these factors in any award 

determinations . Approximately 20% of the awards made to date were reduced because 

of an unreasonable reporting delay . Whether the delay occurred before or after the 

creation of the whistleblower program has affected how the Commission has weighed 

the reporting delay . For instance, in connection with two award claims where the period 

of delay straddled the Dodd-Frank Act, the Commission determined, in its discretion, 

not to weigh the reporting delay as heavily as it might have done had the delay occurred 

entirely after the whistleblower program’s creation .43 In connection with the most 

recent whistleblower award, the Commission found it significant that the delay, while 

relatively limited in duration, was unreasonable in light of the incentives and protections 

now afforded to whistleblowers under the Commission’s whistleblower program .44 

Delay in reporting is particularly problematic where the securities violations continue 

and the ill-gotten gains of the wrongdoing increase after the whistleblower learns of the 

misconduct and does nothing to report the activity internally, to another regulator, or to 

the Commission . 

43	 See Order Determining Award Claim, Exchange Act Rel . No . 75477, File No . 2015-5, at 2 n .3 

(July 17, 2015); Order Determining Award Claim, Exchange Act Rel . No . 73174, File No . 2014-10, 

at 3 n .5 (Sept . 22, 2014) . 

44 See Order Determining Award Claim, Exchange Act Rel . No . 76338, File No . 2016-1 (Nov . 4, 2015) . 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 19 

PRESERVING WHISTLEBLOWERS’ RIGHTS TO 

REPORT TO THE COMMISSION AND SHIELDING 

WHISTLEBLOWERS FROM RETALIATION 

As noted above, protecting whistleblowers’ rights to report possible securities law violations to the Commission, and protecting whistleblowers from retaliation, was a focus 

for OWB in Fiscal Year 2015 and will continue to be a focus in the coming fiscal year . 

Restrictive Agreements 

Exchange Act Rule 21F-17(a) provides that “[n]o person may take any action to impede 

an individual from communicating directly with the Commission staff about a possible 

securities law violation, including enforcing, or threatening to enforce, a confidentiality 

agreement...with respect to such communications .”45 

On April 1, 2015, the Commission brought its first enforcement action against a 

company for its use of confidentiality agreements that impeded whistleblowers in 

violation of Rule 21F-17(a) . The Commission found that Houston-based global 

technology and engineering firm KBR Inc . required witnesses in certain internal 

investigation interviews—including those involving allegations of possible securities 

law violations—to sign confidentiality statements with language warning that they 

could face discipline and even be terminated if they discussed the matters with outside 

parties without the prior approval of KBR’s legal department . The Commission found 

that, although it was unaware of any instances in which (i) a KBR employee was in 

fact prevented from communicating directly with Commission staff about potential 

securities law violations, or (ii) KBR took action to enforce the form confidentiality 

agreement or otherwise prevent such communications, the language found in the form 

confidentiality statement impeded such communications by prohibiting employees 

from discussing the substance of their interview without clearance from KBR’s law 

department under penalty of disciplinary action including termination of employment . 

This language undermined the purpose of Section 21F and Rule 21F-17(a), which is to 

“encourag[e] individuals to report to the Commission .”46 

KBR agreed to pay a $130,000 penalty to settle the Commission’s charges and the 

company voluntarily amended its confidentiality statements by adding language making 

clear that employees are free to report possible violations to the Commission and other 

federal agencies without KBR’s approval and without fear of retaliation . 

Protection for Internal Reporting 

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 . The Dodd-Frank 

Act expressly prohibits employment retaliation against individuals for reporting 

securities law violations and provides that individuals who have experienced such 

retaliation may pursue a private cause of action in the federal courts . 

“On April 1, 2015, 

the Commission 

brought its first 

enforcement 

action against a 

company for its use 

of confidentiality 

agreements 

that impeded 

whistleblowers in 

violation of Rule 

21F-17(a).” 

45 17 C .F .R . § 240 .21F-17(a) .
 

46 Securities Whistleblower Incentives and Protections, 76 Fed . Reg . 34,300, 34,352 (June 13, 2011) .
 
 

 

 

20 | U.S. SECURITIES AND EXCHANGE COMMISSION 

“...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.” 

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

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

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

things, report internally at public companies .47 

In Asadi v. G.E. Energy (USA), LLC, however, the Fifth Circuit interpreted Dodd-Frank 

as limiting employment retaliation protection only to those individuals who report 

securities law violations directly to the Commission .48 

Following Asadi, the Commission has filed amicus curiae briefs in private retaliation 

lawsuits to urge district courts and courts of appeal to defer to the SEC’s rule and 

hold that individuals are entitled to employment retaliation protection if they report 

information of a possible securities violation internally at a publicly-traded company, 

regardless of whether they have separately reported the information to the SEC .49 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 . 

On August 4, 2015, the Commission released interpretive guidance clarifying 

the interaction of the anti-retaliation provisions and the award provisions of the 

Whistleblower Rules with respect to the protection of internal reporting under DoddFrank . That is, individuals can make reports regarding possible securities law violations 

internally, through their companies’ respective reporting structures, and still be protected 

if they then suffer adverse employment consequences—even if they have not yet 

reported to the Commission in the manner required to qualify for an award under the 

Whistleblower Rules .50 

Most recently, the Second Circuit in Berman v. Neo@Ogilvy LLC,

51 held that the 

pertinent provisions of the Dodd-Frank Act were sufficiently ambiguous to warrant 

the court’s deference to the SEC’s rule that the statute’s retaliation protections apply to 

employees who report securities law violations to their employers, regardless of whether 

they also report to the Commission . The Second Circuit acknowledged that its decision 

created a circuit split, because of the Fifth Circuit’s contrary decision in Asadi . The 

Second Circuit also noted the significant existing disagreement among a large number of 

district courts on the issue, the majority of which have deferred to the SEC’s rule . 

47 17 C .F .R . § 240 .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) . 

48 720 F .3d 620 (5th Cir . 2013) . 

49	 See, e.g., Beacom v. Oracle Am., Inc., No . 15-1729 (amicus brief filed with 8th Cir . on Aug . 18, 2015); 

Berman v. Neo@Ogilvy LLC, 2015 WL 5254916 (2d Cir . Sept . 10, 2015) (amicus brief filed before appellate 

decision); Safarian v. Am. DG Energy, Inc., 2015 WL 4430837 (3d Cir . July 21, 2015) (same); Liu MengLin v. Siemens AG, 763 F .3d 175 (2d Cir . 2014) (same); Davies v. Broadcom Corp., 2015 WL 5545513 

(C .D . Cal . Sept . 8, 2015) (amicus brief filed before district court decision); Wiggins v. ING U.S., Inc., 2015 

WL 3771646 (D . Conn . June 17, 2015) (same) . 

50 The interpretive guidance may be found on OWB’s webpage, http://www .sec .gov/whistleblower, and also has 

been published in the Federal Register at 80 Fed . Reg . 47,829 (Aug . 10, 2015) . 

51 No . 14-cv-4626, 2015 WL 5254916 (2d Cir . Sept . 10, 2015), available at http://www .sec .gov/whistleblower
 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 21 

WHISTLEBLOWER TIPS RECEIVED 

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

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

mailing or faxing their tip on Form TCR to OWB .52 Whistleblowers who use the online 

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

a TCR submission number . For those who submit hard-copy TCRs by 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 14,116 whistleblower tips, and in Fiscal Year 2015 

alone, received almost 4,000 whistleblower TCRs .53 

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

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

FY201154 FY2012 FY2013 FY2014 FY2015 

334 3,001 3,238 3,620 3,923 

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 2015, the number of 

whistleblower tips received by the Commission has grown more than 30% . 

The graphic shows by 

percentage the number of 

whistleblower tips the Commission 

received on a monthly basis during 

Fiscal Year 2015 . 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, 

August, September and October . 

SEP. OCT.

10%

AUG. NOV.

8%

DEC.

8%

JUN. JAN.

8%

FEB.

8% APR. MAR. 7%

10%8%

MAY

7%

JUL.

7%

9%

10%

“For each year that 

the whistleblower 

program has 

been in operation, 

the Commission 

has received an 

increasing number 

of whistleblower 

tips.” 

52 17 C .F .R . § 240 .21F-9(a) . 

53 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 . 

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

available for Fiscal Year 2011 . 
 

 

22 | U.S. SECURITIES AND EXCHANGE COMMISSION 

Whistleblower Allegation Type 

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

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

Fiscal Year 2015, the most common complaint categories reported by whistleblowers 

included Corporate Disclosures and Financials (17 .5%), Offering Fraud (15 .6%), and 

Manipulation (12 .3%) .55 

The chart below reflects the number of whistleblower tips received in Fiscal Year 2015 

by allegation type:56 

0

50

100

150

250

300

200

QUARTER 1 

QUARTER 2 

QUARTER 3 

QUARTER 4 

Corporate Offering Manipulation Insider Trading and FCPA Unregistered Market Municipal Other* Not Reported 

Disclosures Fraud Trading Pricing Offerings Event Securities and 

and Financials Public Pension 

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

whistleblower’s own characterization of the violation type . 

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

any allegation category that is listed on the questionnaire . 
 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 23 

The types of securities violations reported by whistleblowers has remained generally 

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

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

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

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

type that the Commission received during Fiscal Years 2012 through 2015 . 

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 2015, the Commission received whistleblower submissions from 

individuals in all 50 states, as well as from the District of Columbia and the U .S . 

territories of Puerto Rico and the U .S . Virgin Islands, as reflected in the map below . 

California, New York, Texas, Florida, and New Jersey yielded the highest number of 

whistleblower tips in Fiscal Year 2015 . 

FREQUENCY

0–20

21–40

41–60

61–100

>101
24 | U.S. SECURITIES AND EXCHANGE COMMISSION 

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

whistleblower tips from individuals in 95 countries outside the United States . In Fiscal 

Year 2015 alone, the Commission received whistleblower submissions from individuals 

in 61 foreign countries . After the United States, OWB received the highest number 

of whistleblower tips in Fiscal Year 2015 from individuals in the United Kingdom, 

Canada, the People’s Republic of China, India, and Australia . The map below reflects all 

countries in which whistleblower tips originated during Fiscal Year 2015 . 

Appendices B and C to this report provide more specific information concerning the 

sources of domestic and foreign whistleblower tips that the Commission received during 

Fiscal Year 2015 . 
DODD-FRANK WHISTLEBLOWER PROGRAM | 25 

PROCESSING OF WHISTLEBLOWER TIPS 

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

Enforcement evaluates incoming whistleblower TCRs and assigns specific, credible, 

and timely TCRs to members of 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 highquality 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 group 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 . Even if the tip does not cause an 

investigation to be opened, it may still help lead to a successful enforcement action if 

the whistleblower provides additional information that 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 

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

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

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

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

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

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

likely it is that the tip will be forwarded to 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 to 

be sent to or pursued by Enforcement staff . 

In certain instances, OMI may determine it is more appropriate that a whistleblower’s 

tip be investigated by another regulatory or law enforcement agency . When this occurs, 

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

under the statute . 

“OWB currently is 

tracking over 700 

matters in which 

a whistleblower’s 

tip has caused a 

Matter Under Inquiry 

or investigation 

to be opened 

or which have 

been forwarded 

to Enforcement 

staff...” 
26 | U.S. SECURITIES AND EXCHANGE COMMISSION 

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 Form TCR in hard copy by mail or fax, OWB enters 

this information into the TCR System so it can be evaluated by OMI .57 During the 

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

additional information to help in the triage process . 

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

additional information or materials to buttress the allegations . Additional information 

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

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

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

the information or materials . 

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

OMI for evaluation . 
 

FY 2015 

Balance of Fund at beginning of fiscal year $437,795,774.92 

Amounts deposited into or credited to Fund during fiscal year $0.0061 

Amount of earnings on investments during fiscal year $866,897.87 

Amount paid from Fund during fiscal year to whistleblowers ($37,950,871.36) 

Amount disbursed to Office of the Inspector General during 

fiscal year 

($18,711.87) 

Balance of Fund at end of the fiscal year $400,693,089.56 

 

 

 

DODD-FRANK WHISTLEBLOWER PROGRAM | 27 

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 .58 Also, the Fund is used to finance the operations of the suggestion 

program of the SEC’s Office of Inspector General .59 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 .60 

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 2015 . 

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

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

statement, and cash flow analysis . That information will be included in 

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

to Congress . 

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

59 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 .” Id. § 78d-4(e) . 

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

61 Pursuant to Section 21F(g)(3) of the Exchange Act, no monetary sanctions are deposited into or credited 

to the Fund if the balance of the Fund exceeds certain thresholds at the time the monetary sanctions are 

collected . Id . § 78u-6(g)(3). 

. 
 

0

100

200

300

400

500

600

700

800

900

1000

2012

2013

2014

2015

687

48

956
 

911
 

764
 

703
 

610 613
 
 

581
 

563
 557
 553
 547
 

525
 

482
 

465
 457
 

273
 

256
 

213
 

196
 192
 190
 186
 

168
 159
 

149
 150
 139
 144
 144
 131
 

114
 

105 102
 

115
 

100
 97 89
 85
 84

64
 58 57
 

Corporate Offering Manipulation Insider Trading and FCPA Unregistered Market Municipal Other* Not Reported 

Disclosures Fraud Trading Pricing Offerings Event Securities and 

and Financials Public Pension 

28 | U.S. SECURITIES AND EXCHANGE COMMISSION 

APPENDIX A
 

WHISTLEBLOWER TIPS BY ALLEGATION TYPE
 

COMPARISON OF FISCAL YEARS 2012, 2013, 2014, AND 2015
 

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

Whistleblower Tips Received by Geographic Location 

United States and its Territories

Fiscal Year 2015*

DODD-FRANK WHISTLEBLOWER PROGRAM | 29 

APPENDIX B
 

WHISTLEBLOWER TIPS RECEIVED BY GEOGRAPHIC LOCATION
 

UNITED STATES AND ITS TERRITORIES
 

FISCAL YEAR 2015*
 

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
 

3

17

6

65

646

66

48

12

7

220

87

11

6

6

93

33

17

16

69

59

48

3

46

69

5

10

53

1

9

9

146

5

37

261

49

13

22

89

3

4

30

1

21

220

25

79

1

7

80

15

10

31

3

0 100 200 300 400 500 600 700 

VI 

*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 2015. 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 2015 was 2892, which constitutes approximately 70% of the individuals participating in the Commission’s whistleblower program for this period. 

Additionally, 822 individuals constituting approximately 20% of the total number of persons participating in the Commission’s whistleblower program for 

Fiscal Year 2015 submitted WB TCRs without any foreign or domestic geographical categorization or submitted them anonymously through counsel. 
Frequency

30 | U.S. SECURITIES AND EXCHANGE COMMISSION 

APPENDIX C
 

WHISTLEBLOWER TIPS RECEIVED BY
 

GEOGRAPHIC LOCATION INTERNATIONAL
 

FISCAL YEAR 2015*
 

Argentina 

Australia 

Austria 

Bahamas, The 

Bangladesh 

Belgium 

Belize 

Botswana 

Brazil 

Bulgaria 

Canada 

Chile 

China, People’s Republic of 

Ecuador 

El Salvador 

France 

Germany 

Honduras 

Hong Kong 

Iceland 

India 

Indonesia 

Ireland 

Israel 

Italy 

Jamaica 

Japan 

Jordan 

Kuwait 

Malaysia 

Mauritius 

Mexico 

Morocco 

Netherlands, The 

New Zealand 

Nigeria 

Norway 

Pakistan 

Panama 

Papua New Guinea 

Philippines 

Poland 

Portugal 

Qatar 

Romania 

Russia 

Saudi Arabia 

Singapore 

Slovak Republic 

South Africa 

South Korea 

Spain 

Sweden 

Switzerland 

Taiwan 

Thailand 

Turkey 

United Arab Emirates 

United Kingdom 

Venezuela 

Zambia 

1
 

29
 

2
 

1
 

1
 

3
 

1
 

1
 

14
 

7
 

49
 

11
 

43
 

1
 

2
 

4
 

8
 

1
 

8
 

1
 

33
 

1
 

20
 

7
 

2
 

1
 

3
 

1
 

3
 

2
 

1
 

13
 

1
 

5
 

4
 

3
 

1
 

1
 

1
 

1
 

2
 

1
 

1
 

1
 

1
 

6
 

1
 

4
 

2
 

3
 

1
 

6
 

1
 

5
 

2
 

7
 

3
 

6
 

72
 

2
 

2
 

0 10 20 30 40 50 60 70 80 

*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 2015. The total number of persons submitting WB TCRs from abroad during Fiscal Year 2015 was 421, which constitutes 

approximately 10% of the individuals participating in the Commission’s whistleblower program for this period. 
OFFICE OF THE WHISTLEBLOWER 

Washington, DC