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What happens after I apply for an SEC whistleblower award?

Preliminary SEC Whistleblower Award Determination

After a whistleblower applies for an SEC whistleblower award (by submitting a completed Form WB-APP within 90 calendar days of the SEC posting the Notice of Covered Action), the SEC Whistleblower Office’s Claims Review Staff will review the application in accordance with the rules of the SEC Whistleblower Program and make a preliminary award determination. The Claims Review Staff may base this determination on:

  • The whistleblower’s Form TCR;
  • The whistleblower’s Form WB-APP;
  • Sworn declarations from the SEC staff that worked on the enforcement action;
  • The enforcement action’s orders and pleadings; and
  • Other appropriate materials as detailed in 17 C.F.R. § 240.21F-12(a).

After the Claims Review Staff makes its preliminary determination (recommending whether to issue and award and the proposed award amount), it will send the whistleblower a written notification of the determination and an explanation of the whistleblower’s rights in the awards claims process. At this point, the whistleblower will have 30 calendar days to:

  • Request the record that was used by the Claims Review Staff in making the preliminary determination; and/or
  • Request a meeting with the SEC Whistleblower Office staff to discuss the preliminary determination (however, such meetings are not required and the office may decline the request). See Rule 21-F10.

SEC whistleblower attorney Washington DCIf you are seeking representation in applying for a SEC whistleblower award or appealing an award determination, call us for a free, confidential consultation at 202-262-8959.

We are a leading firm representing SEC whistleblowers worldwide.

Appealing SEC Whistleblower Preliminary Award Determination

Whistleblowers may appeal the Claims Review Staff’s preliminary determination to deny an award or, in the event the preliminary determination recommends the granting of an award, the amount of the award. Whistleblowers must appeal the determination within 60 calendar days of the later of: (i) the date of the preliminary award determination, or (ii) the date when the SEC Whistleblower Office made materials available for review.

If a whistleblower chooses to appeal the preliminary determination, they will receive a written acknowledgment that the SEC Whistleblower Office received the appeal. Thereafter, the Claims Review Staff will consider the whistleblower’s response, along with any supporting documentation provided, and will make its proposed final determination. See Rule 21-F10.

If a whistleblower chooses not to appeal a preliminary determination, or fails to appeal in a timely manner, the preliminary determination will become the SEC’s final order (except where the preliminary determination recommends granting an award, in which case it will become a proposed final determination). Importantly, a whistleblower’s failure to contest a preliminary determination will constitute a failure to exhaust administrative remedies, and the whistleblower will be prohibited from appealing the determination to a United States Court of Appeals. See Rule 21-F10.

Proposed Final Award Determination and SEC Final Order

Finally, after the preliminary determination becomes the proposed final determination, the whistleblower and the SEC will receive written notification of the determination. Within 30 days of receiving this notification, any Commissioner can request a full review of the proposed final determination. If there is no request within 30 days, the proposed final determination will become the SEC’s final order, which will be promptly forwarded to the whistleblower.

Appealing SEC Whistleblower Award Determination to United States Court of Appeals

If the SEC denies an award to a whistleblower, the whistleblower may file an appeal in an appropriate United States Court of Appeals (either the United States Court of Appeals for the District of Columbia Circuit, or to the circuit where the aggrieved person resides or has his or her principal place of business) within 30 days of the decision being issued. In Doe v. SEC, the court held the standard of review for an appeal of the SEC’s denial of an award is whether the SEC’s determination was based on “substantial evidence.” Doe v. SEC, 2018 U.S. App. Lexis 7449 No. 16-1414 (D.C. Cir. Mar. 20, 2018).

If the SEC issues an award to the whistleblower of between 10 to 30 percent of the monetary actions collected in the action, the whistleblower may not appeal the award determination if the award was made in accordance with subsection (b). See Rule 21F-13.

For more information about whistleblower rewards and bounties, contact the SEC whistleblower lawyers at leading SEC whistleblower firm Zuckerman Law at 202-262-8959.

To learn more about the SEC Whistleblower Program, download Zuckerman Law’s eBook: SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award:

SEC Whistleblower Program Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award

 

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Avatar of Jason Zuckerman

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.

Avatar of Matthew Stock

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He represents whistleblowers around the world in SEC, CFTC and IRS whistleblower claims. He is also a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor.