United States Court of Appeals

for the Fifth Circuit ____________

No. 23-60216

____________

John M. Barr; John McPherson, 

Petitioners, 

versus

Securities and Exchange Commission, 

Respondent. 

______________________________

Petition of Review of an Order from the 

Securities and Exchange Commission

Agency No. 2023-42

______________________________

Before Smith, Engelhardt, and Ramirez, Circuit Judges.

Irma Carrillo Ramirez, Circuit Judge: 

Two whistleblowers challenge the Securities and Exchange 

Commission’s calculation of award amounts under the Dodd–Frank Wall 

Street Reform and Consumer Protection Act. The petitions for review are

DENIED. 

I 

A 

This case concerns the extensive securities fraud perpetrated from 

1999 to 2013 by Life Partners Holdings, Inc. (Life Partners). See SEC v. Life 

United States Court of Appeals

Fifth Circuit

FILED

August 30, 2024

Lyle W. Cayce

Clerk

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2

Partners Holdings, Inc., 854 F.3d 765, 773 (5th Cir. 2017). Because this Court 

has previously considered the details of the fraudulent scheme, see, e.g., id. at 

772–74; Jacobs v. Cowley (In re Life Partners Holdings, Inc.), 926 F.3d 103, 112–

14 (5th Cir. 2019), only immediately relevant facts are recounted here.

In 2012, the Securities and Exchange Commission (the SEC) “filed a 

civil action in federal district court charging [Life Partners] and three of its 

officers with violations of the anti-fraud provisions of the federal securities 

laws.” In late 2014, following a jury trial, the district court entered final 

judgment against Life Partners, in which it was ordered to pay $38.7 million 

in disgorgement and civil penalties. See SEC v. Life Partners Holdings, Inc., 71 

F. Supp. 3d 615, 626 (W.D. Tex. 2014).

Before the district court entered final judgment on January 16, 2015, 

the SEC filed an emergency motion to appoint a receiver “to maintain the 

status quo, prevent further dissipation of assets from [Life Partners], and 

protect [Life Partners’s] investors and creditors.” Four days after entry of 

final judgment, Life Partners filed a voluntary petition for Chapter 11 

bankruptcy. The district court had not yet ruled on the SEC’s motion to 

appoint a receiver when Life Partners filed for bankruptcy, and Life Partners 

openly admitted that it filed for bankruptcy “to ‘avoid the appointment’” of 

a receiver. On February 5, 2015, the district court denied without prejudice 

the motion to appoint a receiver, finding, “[b]ased on [its] review of the 

motions and pleadings filed in [the bankruptcy] court,” that “the SEC will 

be able to effectively seek from the [b]ankruptcy [c]ourt the relief 

sought . . . in the receivership motion.”

In its capacity as an unsecured judgment creditor, the SEC filed a 

motion requesting that the bankruptcy court appoint a Chapter 11 trustee.

The U.S. Trustee filed a similar motion. The bankruptcy court granted the 

SEC’s motion, finding that Life Partners’s gross mismanagement 

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3

constituted cause for appointment of a trustee and the appointment would be 

in the best interests of Life Partners’s creditors and investors.

In June 2016, the Chapter 11 trustee proposed a plan that was 

ultimately confirmed. Among other things, the plan proposed the creation of 

a “‘Creditors’ Trust,’ whose beneficiaries generally comprised unsecured 

creditors.” The plan listed the SEC’s claim for the enforcement-action 

judgment as “its own creditor class,” “allocated a Creditor’s Trust interest” 

to the SEC for the judgment’s full amount, and “estimated the 

corresponding recovery as ‘Unknown.’” As part of the plan, the SEC 

“agreed to reallocate any distributions with respect to its Creditors’ Trust 

interest to . . . the life-settlement investors . . . in return for [Life Partners’s] 

agreement to voluntarily dismiss its appeal then pending” before this Court. 

See Order, SEC v. Life Partners Holdings, Inc., No. 14-51353 (5th Cir. Dec. 22, 

2016). The bankruptcy court confirmed the plan in November 2016. Notably, 

“[u]ndisputed evidence in the administrative record reflects that, as of 

November 2020, there had been no collections or distributions with respect 

to the [SEC]’s Creditors’ Trust interest.”

B

On April 1, 2015, the SEC posted a Notice of Covered Action, inviting 

individuals to apply for whistleblower awards in connection with the Life 

Partners enforcement action. John Barr and John McPherson (Petitioners) 

timely submitted their respective applications.

On September 28, 2020, the SEC’s Claims Review Staff (CRS) issued 

Preliminary Determinations, advising Petitioners of the intent to recommend 

that Barr be denied an award and that McPherson be granted an award of 

“23% of the monetary sanctions collected, or to be collected.” The 

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Preliminary Determination sent to McPherson1 explained that: (1) the SEC 

“shall pay an award to a whistleblower who provides original information that 

leads to the successful enforcement of the covered judicial or administrative 

action, or related action,” (2) “[a] bankruptcy proceeding is neither brought 

by the [SEC] nor does it arise under the securities laws,” (3) “a bankruptcy 

proceeding is not a related action, which must be ‘brought by’ a qualifying 

entity ‘based on’ the same original information that led to the successful 

enforcement of the covered action,” and (4) the bankruptcy case “was not 

brought by a qualifying entity but rather was initiated by a voluntary petition 

under Chapter 11 filed by Life Partners.”

C

Petitioners timely filed their respective written responses to the 

Preliminary Determinations. Barr primarily argued that CRS’s 

determination to deny him an award was “based on inaccurate and 

incomplete information.” After pointing out alleged factual inaccuracies in a 

declaration CRS relied on and listing out his contributions to the SEC’s work 

relating to Life Partners, Barr urged reconsideration and for the SEC to grant 

him an award. McPherson advanced two main arguments: (1) the 

whistleblower-award calculation should be based on what the SEC is “able to 

collect,” and (2) his whistleblower efforts warranted exercise of the SEC’s 

statutorily delegated discretion to pay him a larger award.

On March 27, 2023, the SEC issued the final order regarding the 

whistleblower awards. It revised the ultimate recommendations in the 

Preliminary Determinations and granted Barr 5% and McPherson 20% of “the 

_____________________

1 When the SEC transmits a document to a putative whistleblower, the SEC redacts 

information related to other whistleblowers. Here, this meant that CRS’s explanation to 

McPherson was not provided to Barr.

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amounts collected or to be collected in connection with” the SEC’s 

enforcement action. The SEC disagreed with McPherson’s objections.

Among other legal conclusions, the SEC stated: (1) it did not “walk away 

from a collection of $38.7 million” by voluntarily subordinating its interest in 

the Creditors’ Trust “because it would only have been able to collect a de 

minimis amount, and any such collections would have been dependent upon 

the [SEC] winning on appeal”; (2) the whistleblower-award calculation 

cannot be based on what the SEC “may have been able to but did not collect” 

because “the statutory maximum whistleblower award is based on the 

amount actually collected”; and (3) calculating the award “based on what the 

[SEC] hypothetically ‘was able to collect,’ but did not, would introduce 

uncertainty, inconsistency, and could delay the processing of award claims.”

Barr petitioned this Court for review of the SEC’s final order on April 

24, 2023, and McPherson petitioned the United States Court of Appeals for 

the D.C. Circuit for review on April 25, 2023. The D.C. Circuitsubsequently

transferred McPherson’s petition to this Court under 28 U.S.C. 

§ 2112(a)(5), where it was consolidated with Barr’s petition.

II

Congress commits whistleblower-award determinations to the SEC’s 

discretion. 15 U.S.C. § 78u-6(f). These determinations are reviewed “in 

accordance with section 706 of Title 5,” id., so they may be set aside if 

“found to be ‘arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law,’” Healthy Gulf v. U.S. Army Corps of Eng’rs, 81 F.4th 

510, 520 (5th Cir. 2023) (quoting 5 U.S.C. § 706(2)(A)). 

An agency order is “arbitrary and capricious ‘if the agency has relied 

on factors which Congress has not intended it to consider, entirely failed to 

consider an important aspect of the problem, offered an explanation for its 

decision that runs counter to the evidence before the agency, or is so 

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implausible that it could not be ascribed to a difference in view or the product 

of agency expertise.’” Tex. Oil & Gas Ass’n v. EPA, 161 F.3d 923, 933 (5th 

Cir. 1998) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. 

Co., 463 U.S. 29, 43 (1983)). But this review is “neither sweeping nor 

intrusive. Instead, we ‘ask whether the agency considered the relevant facts 

and articulated a satisfactory explanation for its decision; we cannot 

substitute our judgment for the agency’s.’” Fort Bend County v. U.S. Army 

Corps of Eng’rs, 59 F.4th 180, 194 (5th Cir. 2023) (quoting Amin v. Mayorkas, 

24 F.4th 383, 393 (5th Cir. 2022)). Pure questions of law are reviewed de novo. 

Tex. Clinical Labs, Inc. v. Sebelius, 612 F.3d 771, 775 (5th Cir. 2010) (quoting 

Alwan v. Ashcroft, 388 F.3d 507, 510 (5th Cir. 2004)); see Loper Bright Enters. 

v. Raimondo, 144 S. Ct. 2244, 2273 (2024). Agency decisions are 

“presumptively valid; the [petitioner] bears the burden of showing 

otherwise.” Tex. Tech Physicians Assocs. v. U.S. Dep’t of Health & Hum.

Servs., 917 F.3d 837, 844 (5th Cir. 2019).

III

A

In the Dodd–Frank Wall Street Reform and Consumer Protection 

Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010), Congress “established ‘a 

new, robust whistleblower program designed to motivate people who know 

of securities law violations to tell the SEC.’” Digit. Realty Tr., Inc. v. Somers, 

583 U.S. 149, 155 (2018) (quoting S. Rep. No. 111-176, at 38 (2010)). The 

program’s statutory framework is located in 15 U.S.C. § 78u-6.

The statute outlines the circumstances in which the SEC must pay out 

whistleblower awards:

In any covered judicial or administrative action, or related 

action, the [SEC], under regulations prescribed by the [SEC] 

and subject to subsection (c), shall pay an award or awards to 1 

or more whistleblowers who voluntarily provided original 

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information to the [SEC] that led to the successful 

enforcement of the covered judicial or administrative action, or 

related action, in an aggregate amount equal to—

(A) not less than 10 percent, in total, of what has been 

collected of the monetary sanctions imposed in the 

action or related actions; and

(B) not more than 30 percent, in total, of what has been 

collected of the monetary sanctions imposed in the 

action or related actions.

Id. § 78u-6(b)(1)(A)–(B). 

The SEC is required to pay a whistleblower award in a “covered 

judicial or administrative action, or related action.” See id. § 78u-6(b)(1). 

“[C]overed judicial or administrative action” and “related action” are 

defined terms. A covered judicial or administrative action refers to “any 

judicial or administrative action brought by the [SEC] under the securities 

laws that results in monetary sanctions exceeding $1,000,000.” Id. § 78u6(a)(1). A related action, “when used with respect to any judicial or 

administrative action brought by the [SEC] under the securities laws,” refers 

to “any judicial or administrative action brought by [the Attorney General of 

the United States, an appropriate regulatory authority, a self-regulatory 

organization, or a State attorney general in connection with any criminal 

investigation] that is based upon the original information provided by a 

whistleblower pursuant to subsection (a) that led to the successful 

enforcement of the [SEC] action.” Id. § 78u-6(a)(5); see id. § 78u6(h)(2)(D)(i)(I)–(IV) (identifying the entities that may bring a related 

action). Whistleblowers are only entitled to awards under § 78u-6(b)(1) 

resulting from these qualifying actions.

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B

The SEC contends Petitioners forfeited their argument that the SEC’s 

actions in the bankruptcy case initiated a new “covered” action. Petitioners 

disagree.

Arguments are forfeited if raised “for the first time on appeal.” Rollins 

v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021). An exception to this rule 

is that “an issue might be addressed for the first time on appeal if ʻit is a purely 

legal matter and failure to consider the issue will result in a miscarriage of 

justice.’” Shambaugh & Son, L.P. v. Steadfast Ins. Co., 91 F.4th 364, 372 (5th 

Cir. 2024) (quoting Rollins, 8 F.4th at 398). While there is “no certain 

answer” as to when this exception should apply, Essinger v. Liberty Mut. Fire 

Ins. Co., 534 F.3d 450, 453 (5th Cir. 2008), we must identify a “principled 

basis” to invoke it, Rollins, 8 F.4th at 398.

As noted above, when the SEC transmitted its Preliminary 

Determination to Barr, the document was redacted in great part, revealing 

information relevant only to Barr’s award application. The SEC’s explanation 

as to why it would recommend denying Barr an award rested on a single 

basis—that the information Barr provided “did not lead to the successful 

enforcement” of the SEC’s enforcement action. Unlike with the Preliminary 

Determination McPherson received, the materials the SEC sent to Barr 

provided no indication of the SEC’s interpretation of law now at issue before 

us.

The argument the SEC claims is forfeited is a purely legal one, and 

Barr had no notice or opportunity to contest the SEC’s argument in the 

agency proceedings. See Bunker v. Dow Chem. Co., --- F.4th ----, No. 24-

20046, 2024 WL 3680804, at *4 n.3 (5th Cir. Aug. 7, 2024) (“Our decision 

not to address Bunker’s newly raised arguments does not result in a 

miscarriage of justice. Bunker had every opportunity to present these 

arguments below.”). We find that a miscarriage of justice would result if we 

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did not consider this purely legal argument since Barr was unaware of the 

SEC’s legal position and had no opportunity to challenge it in the agency 

proceedings.

2

C

Petitioners contend the bankruptcy case is a “covered judicial or 

administrative action” because, among other things, it is an action the SEC 

brought. They also contend the bankruptcy case is a “related action” 

because, among other things, it is an action the SEC or the Attorney General3

brought. The SEC disagrees.

1

The statutory provisions defining qualifying actions are not identical, 

but they do share a phrase—“action brought.” See 15 U.S.C. § 78u-6(a)(1), 

(5). The parties dispute its meaning. 

When interpreting acts of Congress, courts seek the ordinary meaning 

of the enacted language. Nat’l Ass’n of Priv. Fund Managers v. SEC, 103 F.4th 

1097, 1110 (5th Cir. 2024). The statutory text is invariably the first and 

primary consideration, see Parada v. Garland, 48 F.4th 374, 377 (5th Cir. 

2022) (per curiam), and “the words of a statute” are normally given “their 

‘ordinary, contemporary, common meaning,’ absent an indication Congress 

intended them to bear some different import,” Williams v. Taylor, 529 U.S. 

_____________________

2 Given our ultimate conclusion, we assume without deciding that McPherson did 

not forfeit this argument either.

3 Sections 78u-6(a)(5) and 78u-6(h)(2)(D)(i)(I) establish that the Attorney General 

may bring a related action. “The Attorney General is the head of the Department of 

Justice.” 28 U.S.C. § 503. The U.S. Trustees fall within the Department of Justice and 

operate under the Attorney General. See id. §§ 581, 586. Petitioners contend that under 

this structure, the U.S. Trustee qualifies as the Attorney General for purposes of 15 U.S.C. 

§ 78u-6(a)(5).

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420, 431 (2000) (quoting Walters v. Metro. Educ. Enters., Inc., 519 U.S. 202, 

207 (1997)). If a statute’s text is clear and unambiguous, the interpretive 

inquiry ends. Christiana Tr. v. Riddle, 911 F.3d 799, 806 (5th Cir. 2018)

(quoting BMC Software, Inc. v. Comm’r, 780 F.3d 669, 674 (5th Cir. 2015)).

Section 78u-6 does not define the word “action” or the phrase 

“action brought,” so they take their “ordinary meaning.” See HollyFrontier 

Cheyenne Refin., LLC v. Renewable Fuels Ass’n, 594 U.S. 382, 388 (2021)

(quoting FDIC v. Meyer, 510 U.S. 471, 476 (1994)); see also Belt v. EmCare, 

Inc., 444 F.3d 403, 412 (5th Cir. 2006) (“[W]e routinely consult dictionaries 

as a principal source of ordinary meaning . . . .”). An “action” is a “civil or 

criminal judicial proceeding.” Action, Black’s Law Dictionary (12th 

ed. 2024). Precedent confirms this understanding of “action.” See Brown v. 

Megg, 857 F.3d 287, 290 (5th Cir. 2017) (“The ordinary meaning of ‘action’ 

is the entire lawsuit.”); Tejero v. Portfolio Recovery Assocs., L.L.C., 993 F.3d 

393, 396 (5th Cir. 2021) (synonymizing an “action” with “a ‘lawsuit’”); see 

also Brownback v. King, 592 U.S. 209, 220 (2021) (Sotomayor, J., concurring) 

(“An ‘action’ refers to the whole of the lawsuit.”); Corley v. Long-Lewis, Inc., 

965 F.3d 1222, 1236 (11th Cir. 2020) (Pryor, C.J., concurring) (“‘[A]n 

action[]’ . . . refers to ‘the whole case.’” (citation omitted)).

Asfor “action brought,” “[t]he dictionary defines to ‘bring an action’ 

as to ‘sue’ or ‘institute legal proceedings.’” Serna v. L. Off. of Joseph 

Onwuteaka, P.C., 732 F.3d 440, 451 (5th Cir. 2013) (Smith, J., dissenting) 

(quoting Bring an Action, Black’s Law Dictionary 219 (9th ed. 

2009)); see Dynamic CRM Recruiting Sols., L.L.C. v. UMA Educ., Inc., 31 

F.4th 914, 919–23 (5th Cir. 2022) (conducting similar analysis of “brought 

before”); see also Action, Merriam-Webster Online Dictionary, 

https://www.merriam-webster.com/dictionary/action (last visited August 

30, 2024) (“the initiating of a proceeding in a court of justice by which one 

demands or enforces one’s right”). And because “[t]o ‘sue’ is ‘to institute a 

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lawsuit against (another party),’ and to ‘institute’ is, in turn ‘to begin or 

start; commence,’” Serna, 732 F.3d at 451 (Smith, J., dissenting) (original 

alterations and citations omitted); see id. (“[M]any federal statutes use ‘file’ 

and ‘bring’ interchangeably . . . .”), bringing an action refers to the act of 

filing a lawsuit or beginning legal proceedings. See Goldenberg v. Murphy, 108 

U.S. 162, 163 (1883) (“A suit is brought when in law it is commenced, and 

we see no significance in the fact that in the legislation of congress on the 

subject of limitations the word ‘commenced’ is sometimes used, and at other 

times the word ‘brought.’ In this connection the two words evidently mean 

the same thing, and are used interchangeably.”). Federal courts agree on this 

understanding. See, e.g., Hong v. SEC, 41 F.4th 83, 95 (2d Cir. 2022) 

(“[C]ourts commonly refer to a party as having ‘brought an action,’ meaning 

that the party filed a lawsuit or formally initiated an administrative 

proceeding.”); United States ex rel. Chovanec v. Apria Healthcare Grp. Inc., 

606 F.3d 361, 362 (7th Cir. 2010) (“One ‘brings’ an action by commencing 

suit.”); Chandler v. D.C. Dep’t of Corr., 145 F.3d 1355, 1359 (D.C. Cir. 1998) 

(“[T]he phrase ‘bring a civil action’ means to initiate a suit.”). 

2

Petitioners contend the SEC’s motion to appoint a Chapter 11 trustee

constituted bringing a qualifying action under § 78u-6(a).4 They maintain 

that once the bankruptcy court granted the SEC’s motion, the U.S. Trustee 

_____________________

4 The question addressed here is narrow: is a motion to appoint a Chapter 11 trustee 

an “action brought” under § 78u-6(a)(1) or § 78u-6(a)(5)? Because the motion to appoint 

a Chapter 11 trustee is the only act Petitioners point to that may constitute bringing an 

action under § 78u-6(a), the answer to this question must be yes for Petitioners to prevail. 

Accordingly, we do not address whether other filings or procedures in the bankruptcy 

context qualify as an “action brought” in this statutory context.

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appointed a Chapter 11 trustee, “who then initiated the full bankruptcy 

proceedings.”

Key aspects of filing a motion to appoint a Chapter 11 trustee are

incongruent with the plain meaning of bringing an action. First, bankruptcy 

cases are “commenced by the filing with the bankruptcy court of a petition,”

not the filing of a motion to appoint a trustee. 11 U.S.C. § 301(a); see Fed. 

R. Bankr. P. 1002. Second, a motion to appoint a Chapter 11 trustee may 

not be brought until a bankruptcy case has already commenced. See 11 U.S.C. 

§ 1104(a). Third, and more generally, a motion “is—and long has been—

commonly understood to denote a request filed within the context of a 

preexisting judicial proceeding.” In re Wild, 994 F.3d 1244, 1257 (11th Cir. 

2021) (en banc) (emphasis added); see, e.g., Motion, Black’s Law 

Dictionary (12th ed. 2024) (“Frequently, in the progress of litigation, it is 

desired to have the court take some action which is incidental to the main 

proceeding . . . . Such action is invoked by an application usually less formal 

than the pleadings, and called a motion.” (emphasis added) (quoting John 

C. Townes, Studies in American Elementary Law 621 

(1911))); see also Motion in Court, A Modern Dictionary of the 

English Language 446 (2d ed. 1911) (“[A]n application to a court . . . to 

have a rule or order made which is necessary to the progress of an action.” 

(emphasis added)). Taken together, these points run contrary to the notion 

that filing a motion to appoint a Chapter 11 trustee constitutes bringing an 

action for purposes of § 78u-6(a).

Nevertheless, Petitioners argue that even though the bankruptcy case 

was not filed by a qualifying entity, bankruptcy actions are “an umbrella for 

a series of ‘cases within a case,’” and filing the motion to appoint a trustee 

in Life Partners’s bankruptcy case qualifies as an “action brought” by a 

qualifying entity. 

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Petitioners are generally correct that “bankruptcy case[s] embrace[] 

‘an aggregation of individual controversies.’”5 Ritzen Grp., Inc. v. Jackson 

Masonry, LLC, 589 U.S. 35, 37 (2020) (citation omitted). But they provide 

no authority to connect this general principle to the facts before us.

It is axiomatic that “statutory terms are generally interpreted in 

accordance with their ordinary meaning.” BP Am. Prod. Co. v. Burton, 549 

U.S. 84, 91 (2006). As explained above, the ordinary meaning of “action 

brought” does not readily encompass a motion to appoint a Chapter 11 

trustee, and Petitioners provide no authority explaining why the meaning of 

“action brought” should be understood as something other than its ordinary 

meaning. They merely point to the various ways in which the SEC and the 

U.S. Trustee were involved in the bankruptcy case. But it is not clear how or 

why these contentions demonstrate that the filing of the motion to appoint a 

Chapter 11 trustee constitutes bringing an action for purposes of § 78u-6. See

15 U.S.C. § 78u-6(a)(1), (5), (b)(1); see also United Servs. Auto. Ass’n v. Perry, 

102 F.3d 144, 146 (5th Cir. 1996) (“A statute is ambiguous if it is susceptible 

of more than one accepted meaning.” (emphasis added)).

Additionally, there are key problems with Petitioners’ argument 

regarding the meaning of “action brought” and the focus on the word 

“proceeding.” They appear to argue that “action” and “proceeding” are 

synonyms, and therefore any “proceeding” within a bankruptcy case is an 

“action” for § 78u-6’s purposes. While that might be the case in some 

instances, “proceeding” ordinarily refers to aspects of an already 

_____________________

5 This understanding of bankruptcy cases comes from the application of the 

final-judgment rule in the bankruptcy context. See generally 16 Charles Alan Wright 

et al., Federal Practice and Procedure § 3926.2 (3d ed.) (June 2024 Update). 

Petitioners do not provide authority supporting the notion that the way bankruptcy 

proceedings are treated for final-judgment purposes translates to the context of qualifying 

actions under § 78u-6(a).

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commenced “action.” See Proceeding, Black’s Law Dictionary (12th 

ed. 2024) (“The regular and orderly progression of a lawsuit, including all 

acts and events between the time of commencement and the entry of 

judgment. . . . An act or step that is part of a larger action.”). This is 

specifically the case in the bankruptcy context, in which a “proceeding” is 

“a particular dispute or matter arising within a pending case — as opposed 

to the case as a whole.” Id. Moreover, Petitioners’ argument that the “action 

brought” consists of all proceedings from the filing of the motion to appoint 

a trustee “up to and including the . . . court-ordered reorganization plan”

demonstrates the extent to which they attempt to stretch the statutory 

language. This argument seemingly turns the ordinary meaning of “action 

brought” on its head. Petitioners do not provide authority explaining why the 

understanding they articulate is proper. See Deal v. United States, 508 U.S. 

129, 131–32 (1993) (“[A]ll but one of the meanings [of a word] is ordinarily 

eliminated by context.”), superseded by statute on other grounds, First Step Act 

of 2018, Pub. L. No. 115-391, 132 Stat. 5194.

Given the lack of fit between the plain language of “action brought” 

and the filing of a motion to appoint a Chapter 11 trustee, we find that filing 

a motion to appoint a Chapter 11 trustee does not qualify as bringing a 

“covered judicial or administrative action” or a “related action.” See 15 

U.S.C. § 78u-6(a)(1), (5).

3

Petitioners assert two additional arguments. 

First, in a variation on their main argument, Petitioners contend that 

the SEC’s involvement in the bankruptcy case constitutes a “covered judicial 

or administrative action” because the bankruptcy case was simply a 

“continu[ation]” of the SEC’s “single enforcement strategy” that began 

with the enforcement action in the United States District Court for the 

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Western District of Texas. But Petitioners do not grapple with the ordinary 

meaning of “action brought” in § 78u-6(a). Their “continuation” argument

does not comport with the ordinary meaning of “bringing an action,” i.e., 

initiating a lawsuit or legal proceedings. See Harris v. Garner, 216 F.3d 970, 

974 (11th Cir. 2000) (en banc) (“‘[B]rought’ and ‘bring’ refer to the filing or 

commencement of a lawsuit, not to its continuation.”). Petitioners’ reading 

would do away with the commencement aspect of “bringing an action.” See 

FCC v. AT&T Inc., 562 U.S. 397, 407 (2011) (declining to adopt a party’s 

reading of a statutory term where the party did not provide a “sound reason 

in the statutory text or context to disregard” the term’s “ordinary 

meaning”); see also 17 C.F.R. § 240.21F-4(d) (“An action generally means a 

single captioned judicial or administrative proceeding brought by the [SEC].” 

(emphasis added)).

Second, Petitioners argue that the SEC’s interpretation of 15 U.S.C. 

§ 78u-6 is contrary to the purpose of the whistleblower statute and will 

damage the design and efficacy of the whistleblower program. These 

contentions go to policy concerns underlying the statute, which are 

appropriate for Congress’s consideration, not ours. See BP P.L.C. v. Mayor of 

Balt., 141 S. Ct. 1532, 1542 (2021) (“‘[E]ven the most formidable’ policy 

arguments cannot ‘overcome’ a clear statutory directive.” (quoting 

Kloeckner v. Solis, 568 U.S. 41, 55 n.4 (2012))). “Laws are the product of 

‘compromise,’ and no law ‘pursues its purposes at all costs.’” Luna Perez v. 

Sturgis Pub. Schs., 598 U.S. 142, 150 (2023) (brackets and ellipsis omitted) 

(quoting Henson v. Santander Consumer USA Inc., 582 U.S. 79, 89 (2017)). 

While Petitioners’ policy concerns are well-taken, courts “do not generally 

expect statutes to fulfill 100% of all of their goals.” Cyan, Inc. v. Beaver Cnty. 

Emps.’ Ret. Fund, 583 U.S. 416, 433 (2018). “[T]he best guide to what 

Congress intends” in a statute is “what Congress says in [the] statute’s 

text,” United States v. Koutsostamatis, 956 F.3d 301, 310 (5th Cir. 2020), and 

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“a statute’s purpose may not override its plain language,” United States v. 

Rainey, 757 F.3d 234, 245 (5th Cir. 2014). See Richards v. United States, 369 

U.S. 1, 9 (1962) (“[L]egislative purpose is expressed by the ordinary meaning 

of the words used.”). Because § 78u-6’s text is plain and unambiguous, we 

must give effect to the text as enacted by Congress without considering 

statutory purpose. See Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620, 622 

(5th Cir. 2013).

* * *

Because the motion to appoint a trustee in the bankruptcy case was 

not an “action brought by” a qualifying entity, it does not meet the definition 

of a “covered judicial or administrative action” under § 78u-6(a)(1) or a 

“related action” under § 78u-6(a)(5). In the absence of an action identified

by the statute, § 78u-6(b)(1) does not require the SEC to pay whistleblower 

awards to Barr and McPherson predicated on the bankruptcy case.6

D

Seeking a larger award amount than the SEC originally allotted, 

McPherson requests that we “clarify the extent of the [SEC]’s exemptive 

authority” and remand for further consideration by the SEC. The authority 

McPherson refers to comes from 15 U.S.C. § 78mm(a)(1), which allows the 

SEC to “conditionally or unconditionally exempt any person, security, or 

transaction, or any class or classes of persons, securities, or transactions, 

from any provision or provisions of this chapter or of any rule or regulation 

thereunder, to the extent that such exemption is necessary or appropriate in 

_____________________

6 Given this conclusion, Petitioners’ remaining arguments on the merits, with the 

exception of the matter examined in Section III.D infra, need not be considered. See PDK 

Labs. Inc. v. DEA, 362 F.3d 786, 799 (D.C. Cir. 2004) (Roberts, J., concurring in part and 

concurring in the judgment) (“[I]f it is not necessary to decide more, it is necessary not to 

decide more . . . .”).

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the public interest, and is consistent with the protection of investors.”

McPherson supports his request with two contentions: (1) there is no 

limitation in § 78mm(a)(1)’s text proscribing the SEC’s use of its exemptive 

authority as to the award amount, and (2) the SEC has previously exempted 

whistleblowers from pertinent statutory requirements.

First, the SEC’s final order does not indicate any disagreement as to 

§ 78mm(a)(1)’s meaning. The SEC stated:

We have used this discretionary authority to exempt 

whistleblowers from certain of the program’s rules under 

limited circumstances. However, the limitation on the amount 

of the award to be issued in connection with any Covered 

Action was set by statute, and we have never used our 

discretion under Section 36(a)(1) of the Exchange Act to 

exempt a whistleblower from a statutory requirement or to 

approve an award amount above the statutory limit. The text 

of the statute reflects a clear congressional design to grant 

awards of no more than 30 percent of the amounts collected. 

Congress established the same framework for awards to be paid 

to whistleblowers in cases brought by the Commodity Futures 

Trading Commission and under the Anti-Money Laundering 

Act. Given the clarity and consistency of the statutory design 

for whistleblower awards, the [SEC] does not believe it would 

be appropriate to use its exemptive authority to award an 

amount above the statutory limit even in cases such as this one, 

where a higher award amount might otherwise be warranted.

It did not take the position that it was statutorily precluded from exercising 

its exemptive authority as to McPherson. 

Second, though McPherson claims the SEC has previously exempted 

whistleblowers from pertinent statutory requirements, he cites two 

supporting examples—only one actually involved the use of the exemptive 

authority, but there the SEC exempted the whistleblower from a regulatory, 

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not statutory, requirement. See Order Determining Whistleblower Award 

Claim, Release No. 72727, 2014 WL 3749705, at *1 (July 31, 2014) (“[W]e 

therefore believe it appropriate in the public interest and consistent with the 

protection of investors to waive the ‘voluntary’ requirement of Rule 21F-4(a)

on the unique facts of this award claim and to make an award to Claimant.” 

(emphasis added)).

To the extent McPherson’s request is simply for the SEC to 

reconsider its exemptive-authority decision, McPherson must demonstrate 

that the SEC abused its discretion in declining to exempt McPherson from 

the statutory limits. See 5 U.S.C. § 706(2)(A). But merely disagreeing with 

the SEC’s decision does not show that the agency abused its discretion.

IV

The petitions for review are DENIED.

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