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ARTICLE · 06 JULY 2013

SEC Awards Second-Ever Whistleblower Bounty

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On June 12, 2013, the SEC issued the second-ever whistleblower bounty award pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act

United StatesEmployment and HR
Steven Pearlman
Steven Pearlman
Allana Grinshteyn
Allana Grinshteyn
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On June 12, 2013, the SEC issued the second-ever whistleblower bounty award pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in connection with SEC v. Andrey C. Hicks and Locust Offshore Management, LLC., No. 11-cv-11888 (D. Mass. 2011). This bounty could be the tip of the iceberg, and is particularly noteworthy because the award was divided among three individuals and the fourth tipster was denied an award.

Background

In October 2011, the SEC filed an enforcement action against the defendants in Locust alleging fraud in connection with the offer and sale of securities. In March 2012, the U.S. District Court for the District of Massachusetts entered judgment in favor of the SEC after default was entered against the defendants. The Court held both defendants jointly and severally liable for disgorgement and prejudgment interest in the amount of $2,512,058.39, and imposed a civil penalty against each of the

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