Independent Analysis

Lack Of Independent Analysis Dooms SEC Whistleblower Reward Claim

In connection with the case SEC v. Mattera, et al., a claimant filed an application for an SEC whistleblower award.  The Claims Review Staff (“CRS”) denied the award application for two reasons.  First, the information that the claimant gave to the SEC was not derived from his or her own independent knowledge.  Second, the claimant did not provide the SEC with his or her own independent analysis of that information. Subsequently, the CRS’s Preliminary Determination became the Final Order of the Commission.
independent analysis

The SEC’s Final Order

Independent Knowledge

The Order states that the information that the claimant provided to the SEC came “entirely” from publicly available sources.  Therefore, it was not the claimant’s independent knowledge as required by Rule 21F-4(b)(2). Rule 21F-4(b)(2) defines “independent knowledge” as “factual information in your possession that is not derived from publicly available sources.” The rule goes on to explain that to be eligible for an SEC whistleblower reward, “You may gain independent knowledge from your experiences, communications and observations in your business or social interactions.”

Independent Analysis

Rule 21F-4(b)(3) talks about a whistleblower’s independent analysis. Even if a whistleblower provides the SEC with information that is not based on his or her own independent knowledge, the whistleblower might still be able to win an SEC whistleblower award if he or she provides the SEC with his or her own independent analysis of that information. Rule 21F-4(b)(3) states:

Independent analysis means your own analysis, whether done alone or in combination with others. Analysis means your examination and evaluation of information that may be publicly available, but which reveals information that is not generally known or available to the public.  (Underlines in original.)

However, according to the Order, the claimant did not provide the SEC with an “examination and evaluation of” the information that he or she submitted to the SEC that revealed information that was not otherwise available to the public or generally known.

Additional Information

For more about submitting information derived from an SEC whistleblower’s independent analysis, click on the link below:  

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