On April 27, the U.S. Securities and Exchange Commission (SEC) issued a $500,000 whistleblower award to an individual who voluntarily provided the agency with original information that led to a successful enforcement action. In issuing the award, the SEC waived its TCR filing requirement.

Through the SEC Whistleblower Program, qualified whistleblowers are entitled to awards of 10-30% of the sanctions collected by the SEC in the relevant enforcement action. In order to qualify for an award, a whistleblower must file a formal TCR with the SEC within 30 days of first contacting the agency about the misconduct.

The SEC has the discretionary authority to waive the TCR requirement in instances where it “would be in the public interest and consistent with the protection of investors for the Commission” to do so. 

In this case, the SEC waived the TCR requirement in light of a number of factors outlined in the award order. The whistleblower reported the securities violations to another federal agency, which, in turn, shared the information with the SEC. The whistleblower was aware that the SEC had received the information and did not file a formal TCR submitting the information.

“We do not, however, suggest in any way that a putative whistleblower is relieved of the requirement to file a Form TCR merely because they first report to another federal agency, and that agency provides the same information to the Commission,” the SEC clarifies in the award order.

In fiscal year 2021, the agency shattered records by awarding approximately $564 million to 108 individuals. Overall, the SEC has awarded approximately $1.2 billion to 269 individuals since issuing its first award in 2012.

Individuals considering blowing the whistle on securities violations should first contact an experienced SEC whistleblower attorney to ensure they are fully protected and qualify for the largest award possible.

Geoff Schweller also contributed to this article.