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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
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Second chance for SEC whistleblowers

Some SEC whistleblowers act on principle and not for the money. But last week’s $14 million reward from the SEC may cause some tipsters to reconsider. Those who want a second chance to follow the money may get one.

Under the SEC’s rules, cases eligible for whistleblower rewards are posted on the SEC website. Called ‘Covered Actions,’ those are the cases for which tipsters can file a claim, even if they didn’t make an earlier claim.

Once the SEC posts a Notice of Covered Action on its website, individuals have 90 calendar days to apply for an award by submitting a claim by midnight on the claim due date listed for that action.

For instance, anyone who provided information that contributed to the IBM or Tyco FCPA enforcement actions can still ask the SEC for a share of the amounts recovered. IBM paid the SEC $10 million in penalties, and Tyco paid the SEC and DOJ a combined $26 million. The IBM notice of Covered Action runs until November 14, and Tyco’s until October 21.

Covered Actions are enforcement actions with judgments issued after July 21, 2010 that resulted in financial sanctions of more than $1 million. Whistleblower rewards in Covered Actions can be 10% to 30% of the amounts recovered, depending on the timeliness and quality of the whistleblower’s information.

‘The inclusion of a Notice [of Covered Action] means only that an order was entered with monetary sanctions exceeding $1 million,’ the SEC said. ‘By posting a Notice for a particular case, we are not making any determinations either that (i) a whistleblower tip, complaint or referral led to the Commission opening an investigation or filing an action with respect to the case or (ii) an award to a whistleblower will be paid in connection with the case.’

The claim form — Form WB-APP (pdf here) — can be sent by mail to: SEC, Office of the Whistleblower, 100 F Street NE, Mail Stop 5971, Washington, DC 20549; or by fax at (703) 813-9322.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

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