SEC Awards Whistleblower Under Internal Reporting "Safe Harbor"

The SEC awarded over $500,000 to a whistleblower for providing original information that led to a successful enforcement and aided in stopping an ongoing fraudulent scheme.

According to the SEC Order, the whistleblower reported alleged misconduct internally to his employer first, and then within 120 days reported the same information to the SEC, thereby satisfying the safe-harbor provision of SEA  Rule 21F-4(b)(7). Under that provision, the SEC treats the whistleblower's information as though it had been submitted to the SEC at the same time it was internally reported, as long as the whistleblower reports the information to the SEC within the 120-day window.

Commentary Lex Urban