SEC Bans Repeat, Bad-Faith Tipster From Future Submissions

Last month, after an individual filed 196 award applications, the SEC Office of the Whistleblower (OWB) issued a detailed Final Order deeming him/her ineligible for an award in any of his/her pending applications and prohibiting him/her from filing any future submissions with the SEC. The OWB explained that this person “has knowingly and willingly made false, fictitious, or fraudulent statements to the Commission over a course of years and continues to do so,” and that “all but one” of his/her 196 applications “lack even a superficial factual nexus to the covered actions for which [s/he] is seeking an award.” It further noted that the investigations of this person’s applications had consumed significant resources and delayed its ability to finalize awards to claimants who filed meritorious applications.

According to the SEC, it had “engaged in numerous communications with [this person] to explain the rules governing the whistleblower program and its view of the deficiencies of [this person’s] submissions, and [gave the person] the opportunity to correct [his/her] actions.” After citing specific examples of such communications, it noted that despite its numerous warnings, this person continued to engage in “bad-faith conduct.”

Through this Final Order, the SEC Office of the Whistleblower took what appears to be a necessary and prudent step to protect the integrity and efficiency of its program. Hopefully this will generally serve deter future unfounded tips.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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