In the Matter of the Claim for Award
Two whistleblowers received a combined $3 million SEC award for providing original information that led to a successful enforcement action involving fraud, misappropriated funds, and fraudulent transfers, with Claimant 1 helping focus the investigation early and Claimant 2 uncovering illicit financial activity.
The SEC awarded Claimant 1 and Claimant 2 a combined initial payment of approximately $3 million for providing original information that triggered a successful enforcement action involving fraud, misappropriated funds, and fraudulent transfers. Claimant 1 assisted early in the investigation by helping staff focus their theories and resources, while Claimant 2 uncovered key evidence of financial misconduct, including illicit fund transfers. Both whistleblowers provided ongoing cooperation through multiple interviews and document productions, received no culpability findings, and were awarded undisclosed percentages totaling ***% under SEC Rule 21F-6, reflecting the significance of their contributions and the public interest in deterring securities violations.
The U.S. Securities and Exchange Commission (SEC) awarded two whistleblowers, Claimant 1 and Claimant 2, a combined initial payment of approximately $3 million for providing original information that led to a successful enforcement action involving fraud, misappropriated funds, and fraudulent transfers. Claimant 1 played a pivotal role early in the investigation by helping enforcement staff narrow their focus and develop key theories, significantly accelerating the probe. Claimant 2 was instrumental in uncovering the misappropriation of funds and tracing fraudulent transfers, providing critical evidence that strengthened the case. Both whistleblowers cooperated extensively throughout the investigation, participating in multiple interviews and producing extensive documentation, and neither contested the SEC’s preliminary award determination nor exhibited culpability or unreasonable reporting delays. The SEC applied Rule 21F-6 criteria, weighing the significance of the information, the quality of assistance, law enforcement interests, and the absence of internal compliance interference. The award percentages for each whistleblower were redacted but collectively totaled ***%, reflecting the independent and substantial value of their contributions. The SEC emphasized that the award not only recognized their efforts but also reinforced its commitment to incentivizing insiders to report securities violations and deter future misconduct. Monetary sanctions included amounts already distributed or to be distributed to harmed investors, as permitted under Rule 21F-4(e).
Extracted insights
- $3.00M $3 million $1M–$10M
- person claims review staff
- agency Securities and Exchange Commission
- Claimant 1 receive whistleblower award Percentage of monetary sanctions in Covered Action
- Claimant 2 receive whistleblower award Percentage of monetary sanctions in Covered Action
- Claimants receive initial combined payment Approximately $3 million
- Claimant 1 provided original information to SEC
- Claimant 2 provided original information to SEC
- Claimant 1 helped Enforcement staff Focus resources and theories early in investigation
- Claimant 2 helped Enforcement staff Uncover misappropriated funds and fraudulent transfers
- SEC issued Order Determining Whistleblower Award Claims on June 14, 2021
- Claims Review Staff issued Preliminary Determinations Whistleblower award recommendations for Claimant 1 and Claimant 2
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 92163 / June 14, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-59 In the Matter of the Claim for Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS The Claims Review Staff (“CRS”) issued Preliminary Determinations recommending that (“Claimant 1”) receive a whistleblower award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the above-referenced Covered Action; and that (“Claimant 2,” and collectively with Claimant 1, the “Claimants”) receive a whistleblower award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the above-referenced Covered Action. Based upon anticipated future collections, the aggregate % award to Claimants would equal an initial combined payment of approximately $3 million. 1 Claimant 1 and Claimant 2 each provided written notice of their decisions not to contest the Preliminary Determinations. The recommendation of the CRS is adopted. The record demonstrates that Claimant 1 and Claimant 2 each voluntarily provided original information to the Commission, and that this information led to the successful enforcement of the Covered Action. 2 Applying the award criteria in Rule 21F-6 of the Exchange Act to the specific facts and circumstances here, we find the proposed award percentages for the Covered Action are appropriate. 3 In reaching that determination with regard to Claimant 1, we considered that Claimant 1 provided Enforcement staff with assistance early in the investigation and helped the staff focus its resources and theories. In reaching that determination with regard to Claimant 2, we considered that Claimant 2 helped Enforcement staff uncover misappropriated funds and fraudulent transfers. Both Claimant 1 and Claimant 2 provided ongoing assistance to Enforcement staff through multiple interviews and document productions. Based on the facts and circumstances of this matter, we believe that a % whistleblower award to Claimant 1 and a % whistleblower award to Claimant 2 would recognize the independent significance of the assistance of Claimant 1’s and Claimant 2’s information and the high law enforcement interest involved in this matter. Accordingly, it is hereby ORDERED that (1) Claimant 1 shall receive an award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the Covered Action, and (2) Claimant 2 shall receive an award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the Covered Action. By the Commission. 2 Vanessa A. Countryman Secretary
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 92163 / June 14, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-59 In the Matter of the Claim for Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIMS The Claims Review Staff (“CRS”) issued Preliminary Determinations recommending that (“Claimant 1”) receive a whistleblower award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the above-referenced Covered Action; and that (“Claimant 2,” and collectively with Claimant 1, the “Claimants”) receive a whistleblower award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the above-referenced Covered Action. Based upon anticipated future collections, the aggregate % award to Claimants would equal an initial combined payment of approximately $3 million. 1 Claimant 1 and Claimant 2 each provided written notice of their decisions not to contest the Preliminary Determinations. The recommendation of the CRS is adopted. The record demonstrates that Claimant 1 and Claimant 2 each voluntarily provided original information to the Commission, and that this information led to the successful enforcement of the Covered Action. 2 Applying the award criteria in Rule 21F-6 of the Exchange Act to the specific facts and circumstances here, we find the proposed award percentages for the Covered Action are appropriate. 3 In reaching that determination with regard to Claimant 1, we considered that Claimant 1 provided Enforcement staff with assistance early in the investigation and helped the staff focus its resources and theories. In reaching that determination with regard to Claimant 2, we considered that Claimant 2 helped Enforcement staff uncover misappropriated funds and fraudulent transfers. Both Claimant 1 and Claimant 2 provided ongoing assistance to Enforcement staff through multiple interviews and document productions. Based on the facts and circumstances of this matter, we believe that a % whistleblower award to Claimant 1 and a % whistleblower award to Claimant 2 would recognize the independent significance of the assistance of Claimant 1’s and Claimant 2’s information and the high law enforcement interest involved in this matter. Accordingly, it is hereby ORDERED that (1) Claimant 1 shall receive an award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the Covered Action, and (2) Claimant 2 shall receive an award equal to percent ( %) of the monetary sanctions collected, or to be collected, in the Covered Action. By the Commission. 2 Vanessa A. Countryman Secretary