In the Matter of the Claims for an Award
summary
The SEC awarded Claimant 1 over $1 million and Claimants 2 and 3 a joint $270,000 for providing original information that led to a successful enforcement action against Redacted for securities violations, rejecting Claimants 2 and 3’s request for higher individual awards and affirming their joint whistleblower status.
paragraph
The SEC imposed monetary sanctions in a settled administrative action against Redacted for securities fraud, resulting in a total whistleblower award of over $1.27 million. Claimant 1 received over $1 million (***% of sanctions) for providing original, critical information that initiated the investigation, while Claimants 2 and 3 jointly received over $270,000 (***%) for information related to misconduct by a separate entity, deemed complementary but less central. The SEC denied Claimants 2 and 3’s appeal for higher percentages or separate status, upheld their joint designation under Rule 21F-4(d), and extended Claimant 1’s award eligibility to future sanctions up to $1 million in a related pending proceeding.
narrative
The SEC awarded a total of over $1.27 million to three whistleblowers whose original information led to a successful enforcement action against Redacted for securities violations spanning multiple entities. Claimant 1 received over $1 million (***% of sanctions) for providing pivotal, independently verified information that directly triggered the investigation and substantially aided enforcement efforts. Claimants 2 and 3 jointly received over $270,000 (***%) for information concerning misconduct by a separate entity, which contributed to the broader Covered Action but was deemed less central than Claimant 1’s. Although Claimants 2 and 3 contested the Preliminary Determination, arguing for higher individual awards and separate whistleblower status, the SEC rejected their claims, affirming their joint designation under Rule 21F-4(d) based on precedent and their joint application. The Commission also determined that Claimant 1’s award eligibility extends to any future monetary sanctions up to $1 million in a related, still-pending administrative proceeding. All three claimants satisfied statutory requirements for whistleblower awards, having voluntarily submitted original information that led to sanctions exceeding $1 million. The SEC emphasized that while all contributions were valuable, the magnitude and initiating nature of Claimant 1’s information justified the disparity in award amounts.
Classified unregistered-securities(confidence 70%). EDGAR detection: forms Form D/S-1· recall 41% / precision 30%. detection rule →
Statutes
17 C.F.R. § 240.21F-10(e)Rule 21F-4(d)Rule 21F-2(a)Rule 21F-3(a)Rule 21F-9Rule 21F-5(b)Rule 21F-10(e)
Parties
redacted redacted
Keywords
redacted redactedredactedclaimantclaimant claimantcovered actionawardmonetary sanctionssanctions collectedactioncoveredcommissionjointenforcement staffmonetarysanctions
Extracted insights
Dollar amounts 3
- $1.00M $1,000,000 $1M–$10M
- $1.00M $1 million $1M–$10M
- $270K $270,000 $100K–$1M
Entities 1
- person redacted redacted
Triples 10
- The Claims Review Staff issued a Preliminary Determination
- Claimant 1 provided written notice of Claimant 1’s decision not to contest the Preliminary Determination
- Claimant 2 and Claimant 3 filed a timely response contesting the Preliminary Determination
- The CRS recommended a total %*** award
- The CRS recommended that Redacted be treated as a single Covered Action
- The CRS recommended that Claimant 1 receive % of *** any monetary sanctions collected in the separate, related administrative proceeding
- The Commission instituted settled administrative and cease-and-desist proceedings
- The Commission ordered Redacted to pay Redacted
- The Commission ordered Redacted Redacted
- The Commission instituted cease-and-desist proceedings against Redacted
Text layers
Extracted body text (5,908c)
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 92212 / June 21, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-62 In the Matter of the Claims for an Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending a percent ( %) award, allocated as follows: an award of over $1,000,000 (equal to % of monetary sanctions collected in the Covered Action) to (“Claimant 1”) and a joint award of over $270,000 to (“Claimant 2”) and (“Claimant 3”) (equal to percent %) of monetary sanctions collected in the Covered Action). 1 Claimant 1 provided written notice of Claimant 1’s decision not to contest the Preliminary Determination; Claimant 2 and Claimant 3 jointly filed a timely response contesting the Preliminary Determination. For the reasons discussed below, the CRS’s recommendations are adopted in all regards. I. Background A. The Covered Action On , the Commission instituted settled administrative and cease-and-desist proceedings in charged found that for the the Commission’s Orders The Commission’s Order With respect to the the Commission’s Orders charged The Commission ordered to pay The Commission ordered Orders. each have paid the amounts due under the 2 --- page 3 --- The Commission also instituted cease-and-desist proceedings against This proceeding remains pending. B. The Preliminary Determination The CRS issued a Preliminary Determination recommending a total % award, allocated as follows: an award of over $1,000,000 (equal to % of monetary sanctions collected in the Covered Action) to Claimant 1 and a joint award of over $270,000 to Claimant 2 and Claimant 3 (equal to % of monetary sanctions collected in the Covered Action). The CRS further recommended (1) that be treated as a single Covered Action pursuant to Exchange Act Rule 21F-4(d)(1), and (2) that, pursuant to Rule 21F-4(d)(2), Claimant 1 receive % of any monetary sanctions collected in the separate, related administrative proceeding pending against , if $1 million or less are ordered in monetary sanctions. C. Claimants’ Responses to the Preliminary Determination Claimant 1 provided written notice of Claimant 1’s decision not to contest the Preliminary Determination. Claimant 2 and Claimant 3 jointly submitted a timely written response contesting the --- page 4 --- Preliminary Determination. 2 Specifically, Claimant 2 and Claimant 3 argue that they (1) should receive a higher award percentage and (2) should not be treated as joint whistleblowers. III. Analysis The record reflects that all three claimants meet the definition of a whistleblower under Rule 21F-2(a) and satisfy the statutory criteria for a whistleblower award under Rule 21F-3(a). They provided original information that related to a possible violation of the securities laws that had occurred, was ongoing, or was about to occur, and submitted the information in accordance with the requirements of Rule 21F-9. In addition, they provided the information voluntarily, the information was original, and the information led to the successful enforcement by the Commission of an administrative action in which the Commission obtained monetary sanctions totaling more than $1,000,000. The information provided by Claimant 1 concerning alleged securities violations by caused Enforcement staff to open an investigation. The information provided by Claimant 2 and Claimant 3 concerning alleged securities violations by caused Enforcement staff to open a separate investigation. Both investigations culminated in the filing of the Covered Action. Rule 21F-5(b) provides that if all of the conditions are met for a whistleblower award, the Commission will decide the percentage amount of the award, which must be between 10% and 30% of the monetary sanctions collected. 2 See Exchange Act Rule 21F-10(e), 17 C.F.R. § 240.21F-10(e). 3 --- page 5 ---Claimant 3 provided about misconduct by eventually led the Enforcement Staff to investigate Claimant 2 and Claimant 3 did not provide any information about misconduct by Rather, the Enforcement Staff independently developed the evidence that led to the charges against with respect to the therefore find that the % allocation to Claimant 2 and Claimant 3 and % allocation to Claimant 1 appropriately reflects their respective contributions under the circumstances. We also find that Claimant 2 and Claimant 3 should be treated as joint whistleblowers. We previously treatedClaimant 2 and Claimant 3 as joint whistleblowers in connection with the Covered Action and issued them a joint % award; at no time did they contest their status as joint whistleblowers. Additionally, here, they submitted a joint whistleblower award application through the same counsel with respect to the same underlying information provided to the Commission. IV. Conclusion Accordingly, it is ORDERED that (1) are deemed a single Covered Action pursuant to Exchange Act Rule 21F-4(d)(1), as we find that both proceedings arise out of the same nucleus of operative facts; (2) Claimant 1 shall receive an award equal to % of monetary sanctions collected in the Covered Action, including, pursuant to Rule 21F-4(d)(2), any monetary sanctions collected in a separate administrative proceeding, which we find also arises out of the same nucleus of operative facts as the Covered Action, if $1 million or less is ordered in monetary sanctions; and (3) Claimant 2 and Claimant 3 shall receive a joint award equal to % of monetary sanctions collected in the Covered Action. 6 --- page 7 --- By the Commission. Vanessa A. Countryman Secretary different allocation of the award between the two of them, the Office of the Whistleblower is directed to pay each of them individually 50% of their joint award. 7
OCR text (5,908c · gpumon-ocr-api · 90% conf)
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 92212 / June 21, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-62 In the Matter of the Claims for an Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending a percent ( %) award, allocated as follows: an award of over $1,000,000 (equal to % of monetary sanctions collected in the Covered Action) to (“Claimant 1”) and a joint award of over $270,000 to (“Claimant 2”) and (“Claimant 3”) (equal to percent %) of monetary sanctions collected in the Covered Action). 1 Claimant 1 provided written notice of Claimant 1’s decision not to contest the Preliminary Determination; Claimant 2 and Claimant 3 jointly filed a timely response contesting the Preliminary Determination. For the reasons discussed below, the CRS’s recommendations are adopted in all regards. I. Background A. The Covered Action On , the Commission instituted settled administrative and cease-and-desist proceedings in charged found that for the the Commission’s Orders The Commission’s Order With respect to the the Commission’s Orders charged The Commission ordered to pay The Commission ordered Orders. each have paid the amounts due under the 2 --- page 3 --- The Commission also instituted cease-and-desist proceedings against This proceeding remains pending. B. The Preliminary Determination The CRS issued a Preliminary Determination recommending a total % award, allocated as follows: an award of over $1,000,000 (equal to % of monetary sanctions collected in the Covered Action) to Claimant 1 and a joint award of over $270,000 to Claimant 2 and Claimant 3 (equal to % of monetary sanctions collected in the Covered Action). The CRS further recommended (1) that be treated as a single Covered Action pursuant to Exchange Act Rule 21F-4(d)(1), and (2) that, pursuant to Rule 21F-4(d)(2), Claimant 1 receive % of any monetary sanctions collected in the separate, related administrative proceeding pending against , if $1 million or less are ordered in monetary sanctions. C. Claimants’ Responses to the Preliminary Determination Claimant 1 provided written notice of Claimant 1’s decision not to contest the Preliminary Determination. Claimant 2 and Claimant 3 jointly submitted a timely written response contesting the --- page 4 --- Preliminary Determination. 2 Specifically, Claimant 2 and Claimant 3 argue that they (1) should receive a higher award percentage and (2) should not be treated as joint whistleblowers. III. Analysis The record reflects that all three claimants meet the definition of a whistleblower under Rule 21F-2(a) and satisfy the statutory criteria for a whistleblower award under Rule 21F-3(a). They provided original information that related to a possible violation of the securities laws that had occurred, was ongoing, or was about to occur, and submitted the information in accordance with the requirements of Rule 21F-9. In addition, they provided the information voluntarily, the information was original, and the information led to the successful enforcement by the Commission of an administrative action in which the Commission obtained monetary sanctions totaling more than $1,000,000. The information provided by Claimant 1 concerning alleged securities violations by caused Enforcement staff to open an investigation. The information provided by Claimant 2 and Claimant 3 concerning alleged securities violations by caused Enforcement staff to open a separate investigation. Both investigations culminated in the filing of the Covered Action. Rule 21F-5(b) provides that if all of the conditions are met for a whistleblower award, the Commission will decide the percentage amount of the award, which must be between 10% and 30% of the monetary sanctions collected. 2 See Exchange Act Rule 21F-10(e), 17 C.F.R. § 240.21F-10(e). 3 --- page 5 ---Claimant 3 provided about misconduct by eventually led the Enforcement Staff to investigate Claimant 2 and Claimant 3 did not provide any information about misconduct by Rather, the Enforcement Staff independently developed the evidence that led to the charges against with respect to the therefore find that the % allocation to Claimant 2 and Claimant 3 and % allocation to Claimant 1 appropriately reflects their respective contributions under the circumstances. We also find that Claimant 2 and Claimant 3 should be treated as joint whistleblowers. We previously treatedClaimant 2 and Claimant 3 as joint whistleblowers in connection with the Covered Action and issued them a joint % award; at no time did they contest their status as joint whistleblowers. Additionally, here, they submitted a joint whistleblower award application through the same counsel with respect to the same underlying information provided to the Commission. IV. Conclusion Accordingly, it is ORDERED that (1) are deemed a single Covered Action pursuant to Exchange Act Rule 21F-4(d)(1), as we find that both proceedings arise out of the same nucleus of operative facts; (2) Claimant 1 shall receive an award equal to % of monetary sanctions collected in the Covered Action, including, pursuant to Rule 21F-4(d)(2), any monetary sanctions collected in a separate administrative proceeding, which we find also arises out of the same nucleus of operative facts as the Covered Action, if $1 million or less is ordered in monetary sanctions; and (3) Claimant 2 and Claimant 3 shall receive a joint award equal to % of monetary sanctions collected in the Covered Action. 6 --- page 7 --- By the Commission. Vanessa A. Countryman Secretary different allocation of the award between the two of them, the Office of the Whistleblower is directed to pay each of them individually 50% of their joint award. 7