SEC Whistleblower Qualifications

SEC Whistleblower Qualifications:  Must Provide Information To The SEC

On August 14, 2016, the SEC entered an Order denying an SEC whistleblower award to an award claimant.  According to the Order, the claimant did not satisfy the SEC whistleblower qualifications because he or she did not provide any information to the SEC related to the Covered Action or any other action. The Order specifically states that because the individual lacked the necessary SEC whistleblower qualifications, he or she was “not a ‘whistleblower’ within the meaning of Section 21F(a)(6) of the Exchange Act and Rule 21F-2(a) thereunder…”
SEC whistleblower qualifications

The SEC’s Final Order

The Exchange Act’s Definition Of An SEC Whistleblower

The SEC whistleblower provisions in the Exchange Act are found in 15 U.S.C. § 78u-6(a)(6).  That section states:

The term “whistleblower” means any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.

The Definition Of SEC Whistleblower In The SEC Whistleblower Rules

SEC Rule 21F-2(a) sets forth additional SEC whistleblower qualifications.  Rule 21F-2(a) explains that to be eligible for an SEC whistleblower reward under the SEC whistleblower program:

(1)  You are a whistleblower if, alone or jointly with others, you provide the Commission with information pursuant to the procedures set forth in § 240.21F-9(a) of this chapter, and the information relates to a possible violation of the federal securities laws (including any rules or regulations thereunder) that has occurred, is ongoing, or is about to occur.  A whistleblower must be an individual.  A company or another entity is not eligible to be a whistleblower.

(2)  To be eligible for an award, you must submit original information to the Commission in accordance with the procedures and conditions described in §§ 240.21F-4, 240.21F-8, and 240.21F-9 of this chapter.

Basis For The Order

The Order was heavily redacted.  It gave a general statement as to how the award claimant failed to meet the SEC whistleblower qualifications, but did not go into specifics, unless those details were included in the portions of the Order that were redacted. The one statement explaining the reasoning for the Order was “there is no evidence showing that Claimant 2 provided information to the Commission relating to the above-referenced Covered Action or any other Commission matter as required by Rule 21F-9(a) or (d).”

Additional Information

For additional information about SEC whistleblower qualifications, click on the link below:  

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