Information (Tips) Must Be Submitted on SEC Form TCR And In The Manner Required By The SEC’s Rules

On September 7, 2016, the SEC’s Claims Review Staff (“CRS”) issued a Preliminary Determination recommending the denial of an SEC whistleblower award.  The basis for the recommendation was that the award claimant either failed to submit his or her tip on an SEC Form TCR, or did not do so in the manner required by the SEC whistleblower rules.

The specific language from the Order was that the claimant failed to submit “information about a possible securities law violation in the form and manner required”.

The Preliminary Determination was converted into the Final Order of the Commission on November 7, 2016.

SEC form TCR

The SEC Order

The SEC Form TCR And The Manner Required

The Order cites the procedures for submitting original information set forth in SEC whistleblower rules 21F-9(a)-(b).

Rule 21F-(9)(a) explains that “to be considered a whistleblower”, an individual must submit his or her information about a possible securities law violation to the SEC through one of two methods.  Either the information must be submitted through an online SEC Form TCR, or it must be filled out on a paper SEC Form TCR (Tip, Complaint or Referral) and mailed or faxed to the SEC Office of the Whistleblower.  For more information about the SEC Form TCR, click here.

Rule 21F-9(b) requires a sworn declaration.  According to that rule, to be eligible to receive an SEC whistleblower award, an individual must declare under penalty of perjury that the information he or she is providing to the SEC is “true and correct to the best of your knowledge and belief”.  This sworn declaration must be submitted at the same time that the individual submits his or her information on the SEC Form TCR.

Not An SEC Whistleblower

The Order states that because the claimant did not provide the information in accordance with the SEC’s procedures, he or she was not qualified as a whistleblower under the SEC whistleblower program.

Rule 21F-2(a)(1), referred to in the Order, provides the definition of an SEC whistleblower.  That rule states, in part, that someone is an SEC whistleblower “if” they provide the SEC with information pursuant to the procedures set forth in Rule 21F-9(a) (discussed above).

Not Eligible For An SEC Whistleblower Award

In turn, the claimant was not eligible to receive an SEC whistleblower reward pursuant to Rule 21F-(8)(a). That rule cautions potential SEC whistleblowers that:

To be eligible for a whistleblower award, you must give the Commission information in the form and manner that the Commission requires…. You should read these procedures carefully because you need to follow them in order to be eligible for an award …

Additional Information

For additional information about the form and manner in which information must be submitted to the SEC, click on the link below: