The SEC recently announced that it awarded more than $28 million to four whistleblowers who provided the SEC with significant information that led to the success of an SEC enforcement action. The SEC stated that the whistleblowers were treated as “joint claimants” for the purpose of the award because they jointly submitted their information to the SEC through the same counsel and “provided substantively identical whistleblower award applications.” The SEC credited the joint claimants for providing substantial ongoing assistance throughout the investigation, including having multiple meetings with SEC staff and providing supplemental information that was critical to the SEC’s investigation. As joint claimants, the individuals will each receive an equal share of the award (i.e. 25% of the award).
The SEC also denied an award to a claimant who reported his/her concerns internally to the company. The SEC stated that although the claimant sent a letter to the company reporting concerns, the claimant did not provide that letter to the SEC or other regulators, nor did he/she request that it be provided to regulators, despite knowing of the SEC’s ongoing investigation. Outside counsel for the company provided the letter to the SEC, after which the SEC contacted claimant’s counsel for a meeting. Claimant had the meeting and cooperated, but never submitted the letter or any other information (before or after the meeting with the SEC). As such, the information provided by claimant was not considered to have been submitted voluntarily, and thus claimant was ineligible for an SEC whistleblower award. In addition, claimant failed to file Form TCR. SEC rules require that a submission be made either on Form TCR or online through the SEC website. Claimant’s failure to follow submission rules was another reason why the SEC determined the claimant was ineligible for an award.