On October 14, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award order granting over $1 million to two whistleblowers who separately provided the agency with original information that contributed to the success of the same enforcement action. Each whistleblower will receive over $500,000.
In issuing the awards, the SEC used its discretionary authority to waive a TCR filing requirement. In order to be eligible for whistleblower awards, individuals blowing the whistle to the SEC must file a formal whistleblower disclosure using a Form TCR. However, the SEC has the authority to waive this requirement in instances when an individual is otherwise qualified for an award.
“We have determined that it would be in the public interest and consistent with the protection of investors for the Commission to exercise our discretionary authority under Section 36(a) of the Exchange Act to waive the TCR-submission requirements of Rules 21F-9(a) and (b),” the SEC states in its order.
According to the SEC, the two whistleblowers “were both instrumental in alerting the Commission to the ongoing fraud.” The order also explains that one whistleblower was erroneously led to believe by their attorney that “that no further steps were necessary… to establish eligibility for a whistleblower claim.”
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to awards of 10-30% of the funds collected by the government in the relevant enforcement action. In...
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