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What “related actions” qualify for an SEC whistleblower award?

Awards for “Related Actions” under the SEC Whistleblower Program

Under the SEC Whistleblower Program, the SEC is authorized to pay monetary awards in certain successful “related actions” if the action is based on the same original information that the whistleblower gave to the SEC leading to the SEC obtaining monetary sanctions totaling more than $1 million.

A “related action” is defined as a judicial or administrative action brought by:

  1. the Attorney General of the United States;
  2. an appropriate regulatory authority;
  3. a self-regulatory organization; or
  4. a state attorney general in a criminal case.

An “appropriate regulatory authority” means the Commission, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and any other agencies that may be defined as appropriate regulatory agencies under Section 3(a)(34) of the Exchange Act (15 U.S.C. 78c(a)(34)).

A “self-regulatory organization” means any national securities exchange, registered securities association, registered clearing agency, the Municipal Securities Rulemaking Board, and any other organizations that may be defined as self-regulatory organizations under Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)).

Note though that a related action must be “based upon” the original information provided by the whistleblower to the SEC.  As clarified in a recent order awarding $54 million to two whistleblowers, the “based upon” requirement entails a showing that “the same information that the whistleblower provided to the Commission must have been provided to the other authority and that information must have itself directly contributed to the other authority’s investigative or litigation efforts leading to the success of that authority’s enforcement action. In other words, the whistleblower must demonstrate actual reliance [by the other agency] on the whistleblower’s original information.”

What is the Process to Seek a SEC Whistleblower Award?

SEC Whistleblower Lawyers

If you are aware of securities fraud and need immediate representation, contact the SEC whistleblower lawyers at 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

 

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.

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.