The Securities and Exchange Commission awarded a whistleblower more than $2.2 million to a former company insider whose tips helped the agency open an investigation that led to an enforcement action. The whistleblower first reported the information to another federal agency and later provided the same information to the SEC.
The award is the first to be paid under the “safe harbor” of Exchange Act Rule 21F-4(b)(7), which provides that if a whistleblower submits information to another federal agency and submits the same information to the SEC within 120 days, then the SEC will treat the information as though it had been submitted to the SEC at the same time that it was submitted to the other agency.
The whistleblower voluntarily reported information to a federal agency covered by the rule, which referred the matter to the SEC. The SEC then opened an investigation. Within 120 days of the initial report, the whistleblower provided the same information to the SEC and later provided substantial cooperation in the investigation. Although the SEC report came after the staff had opened its investigation, the SEC treated the submission as though it had been made when the whistleblower provided the information to the other agency.
“Whistleblowers, especially non-lawyers, may not always know where to report, or may report to multiple agencies,” Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said in a statement. “This award shows that whistleblowers can still receive an award if they first report to another agency, as long as they also report their information to the SEC within the 120-day safe harbor period and their information otherwise meets the eligibility criteria for an award.”
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