Form And Manner Requirements:  The SEC TCR Form

On September 7, 2016, the SEC’s Claims Review Staff (“CRS”) issued a Preliminary Determination recommending the denial of an SEC whistleblower award to two claimants.  The explanation for the Preliminary Determination was that the two claimants failed to submit their “information relating to a possible violation of the federal securities laws pursuant to the procedures set forth” in the SEC whistleblower rules.  The CRS specifically referred to the rule that requires whistleblowers to submit their information on an SEC TCR Form.

The Preliminary Determination identified the two claimants collectively as “Claimant 2”.

On November 7, 2016, the CRS’s Preliminary Determination was converted into a Final Order of the Commission.

SEC TCR Form

The Commission’s Final Order

Failure To Follow Procedures

According to the Order, the claimants did not follow the procedures set forth in SEC whistleblower rule 21F-9 when submitting their information to the Commission.

Although the Order was heavily redacted, it seems likely that it was referring to the provisions set forth in SEC whistleblower rules 21F-9(a) and (b).

Rule 21F-(9)(a) requires an individual to submit information or a tip about possible securities law violations to the SEC on a Tip, Complaint or Referral Form (an SEC TCR Form).  The SEC TCR Form can either be submitted online through the SEC’s website, or a paper form can be mailed or faxed to the SEC Office of the Whistleblower.

In addition, Rule 21F-9(b) mandates that to be eligible for an SEC whistleblower award, when a whistleblower submits an SEC TCR Form, he or she must also submit a sworn declaration under penalty of perjury that the information contained in the form is true and correct to the best of the whistleblower’s knowledge and belief.

Not SEC Whistleblowers

The Order stated that because the claimants failed to follow the procedures in Rule 21F-9, they “are not whistleblowers”.

For this determination, the Order cited SEC rule 21F-2(a)(1).  The relevant part of that rule, for purposes of the Order, seems to be the section that says that individuals can be SEC whistleblowers “if” they provide the SEC with information pursuant to the procedures set forth in Rule 21F-9(a), which includes the SEC TCR Form requirement.

Information Not Provided In Writing

Submitting information online through the SEC’s website requires typing that information in on a computer or other electronic device.  Submitting information on a paper SEC Form TCR requires writing or typing the information onto the form.

In confirming the CRS’s recommendation to deny an award, the Order added that the claimants neither stated nor suggested that they “submitted any information to the Commission in writing.”

The Order did not say, however, that some form of writing other than on an SEC TCR Form submitted either online or by mail or fax might have been acceptable.  Nor did the Order cite any SEC whistleblower rules that might support that interpretation.

Because the Order was so heavily redacted, it is unclear why the Commission decided to insert the statement about “in writing” into the Order.

Additional Information

For additional information about the SEC TCR Form, click on the link below: