The SEC Awards More Than $2.2 Million to Whistleblower Under Safe-Harbor Rule

On April 5, 2018, the SEC issued a news release announcing that it had awarded more than $2.2 million to a whistleblower whose tips helped the Commission open an investigation which led to an enforcement action.  The whistleblower initially reported the information to another federal agency and subsequently provided the same information to the SEC.

The award was the first award paid by the SEC under Rule 21F-4(b)(7) of the Exchange Act (the “Safe-Harbor Rule”), which states that whistleblowers who initially provide information to another federal agency and submit the same information to the SEC within 120 days will still be eligible to be considered for an award from the SEC for information that leads to a successful enforcement action.  Notably, although the tipster reported the information to the SEC after the SEC had already opened an investigation, the SEC treated the information as though it had been reported at the same time the tipster provided the information to the other agency, as permitted under the Safe-Harbor Rule.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, commented “[w]histleblowers, especially non-lawyers, may not always know where to report, or may report to multiple agencies…[t]his 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.”

Since 2012, the SEC has paid more than $264 million in whistleblower awards to 54 individuals.  The SEC Release can be found here.

About Faruqi & Faruqi, LLP

Faruqi & Faruqi focuses on complex civil litigation, including securities, antitrust, consumer and wage and hour class actions, as well as shareholder derivative suits.  The firm is headquartered in New York, and maintains offices in California, Delaware, Pennsylvania and Georgia.  Since its founding in 1995, Faruqi & Faruqi has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers, and employees.

To contact the author of this blog or the offices of Faruqi & Faruqi, please call us at (877) 476-7797.

About Nina Varindani

Nina Varindani is a Partner in Faruqi & Faruqi, LLP’s New York office and focuses her practice on securities litigation and shareholder derivative litigation, representing investors in federal and state class action and derivative lawsuits, books and records demands and litigation demands.  Please feel free to contact Nina regarding any questions concerning this blog post or any questions related to F&F’s practice areas,

Posted by Nina Varindani

Partner at Faruqi & Faruqi, LLP
New York Office
Tel: (212) 983-9330
Fax: (212) 983-9331

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