(a) Section 21F(h)(2) of the Exchange Act (15 U.S.C. 78u-6(h)(2)) requires that the Commission not disclose information that could reasonably be expected to reveal the identity of a whistleblower, except that the Commission may disclose such information in the following circumstances:
(1) When disclosure is required to a defendant or respondent in connection with a federal court or administrative action that the Commission files or in another public action or proceeding that is filed by an authority to which we provide the information, as described below;(2) When the Commission determines that it is necessary to accomplish the purposes of the Exchange Act (15 U.S.C. 78a) and to protect investors, it may provide your information to the Department of Justice, an appropriate regulatory authority, a self regulatory organization, a state attorney general in connection with a criminal investigation, any appropriate state regulatory authority, the Public Company Accounting Oversight Board, or foreign securities and law enforcement authorities. Each of these entities other than foreign securities and law enforcement authorities is subject to the confidentiality requirements set forth in Section 21F(h) of the Exchange Act (15 U.S.C. 78u-6(h)). The Commission will determine what assurances of confidentiality it deems appropriate in providing such information to foreign securities and law enforcement authorities.(3) The Commission may make disclosures in accordance with the Privacy Act of 1974 (5 U.S.C. 552a).
(b) You may submit information to the Commission anonymously. If you do so, however, you must also do the following:
(1) You must have an attorney represent you in connection with both your submission of information and your claim for an award, and your attorney's name and contact information must be provided to the Commission at the time you submit your information;(2) You and your attorney must follow the procedures set forth in § 240.21F-9 of this chapter for submitting original information anonymously; and(3) Before the Commission will pay any award to you, you must disclose your identity to the Commission and your identity must be verified by the Commission as set forth in § 240.21F-10 of this chapter.
SEC Awards Record Payout of Nearly $50 Million to Whistleblower / Whistleblower Program Reaches $500 Million in Total Awards (SEC Release)https://www.sec.gov/news/press-release/2020-126In the Matter of the Claim for Award in Connection with Notice of Covered Action [REDACTED] (Order Determining Whistleblower Award Claim, '34 Act Rel. No. 89002, Whistleblower Award Proc. File No. 2020-20)https://www.sec.gov/rules/other/2020/34-89002.pdf, the SEC awarded about $50 million to an individual whistleblower, which is the largest amount awarded to an individual under the Dodd-Frank program. The Claims Review Staff ("CRS") issued a Preliminary Determination recommending the payout to Claimant 1 but recommending the denial of an award to Claimant 2, who alleged that Claimant 1 filed a WB-APP (the application for an Award) "for both of them, as there was no space for them to both sign." Moreover, Claimant 2 argued that the joint filing was purportedly necessitated in part because Claimant" Claimant 2 does not have the resources, such as a computer or internet access, to monitor the SEC's website for the postings of Notices of Covered Action. . ." Unfortunately for Claimant 2, the SEC found that "there is no evidence in the record to support a finding that Claimant 2 was a participant in any manner in Claimant 1's tip . . ."
Claimant Richard J. Herber moves for a stay of the Commission's Order Determining Whistleblower Award Claim (the "Order")1 pending resolution of his appeal to the U.S. Court of Appeals for the Seventh Circuit. 2 That Order denied Herber's whistleblower award claim and granted the award claim of another claimant. 3= = = = =Footnote 1: Order Determining Whistleblower Award Claim, Exchange Act Release No. 89002, 2020 WL 3030497 (June 4, 2020).Footnote 2: Petition for Review, Richard J. Herber v. SEC, No. 20-2174 (7th Cir. July 2, 2020) (Doc. No. 1-1).Footnote 3: 2020 WL 3030497, at *1. The Order denied the award claim submitted by Herber as "Claimant 2" and granted the claim of another individual as "Claimant 1" to protect the confidentiality of both claimants. Herber has since appealed in his own name and thus has waived confidentiality.
traditional, four-factor standard-namely, "(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." Because the first two factors are the most critical, an applicant's failure to demonstrate the requisite likelihood of success or irreparable harm ordinarily will be dispositive of the stay inquiry.Herber makes no attempt to establish that a stay is justified under any of these factors but simply requests "that no money or award be paid to [the other, successful claimant] in this matter until my Petition for Review is completely heard and final judgment determined by the Court of Appeals." We therefore conclude that Herber has not carried his burden on the stay factors.Moreover, our whistleblower rules already prevent the payment of any whistleblower award in this matter until "[t]he completion of the appeals process for all whistleblower awards claims arising from" the covered action. As a result, a stay is unwarranted because there is no possibility that Herber will suffer irreparable injury absent a stay.
https://www.sec.gov/news/press-release/2020-126In the Matter of the Claim for Award in Connection with Notice of Covered Action [REDACTED] (Order Determining Whistleblower Award Claim, '34 Act Rel. No. 89002, Whistleblower Award Proc. File No. 2020-20)
Footnote 1: Order Determining Whistleblower Award Claim, Exchange Act Release No. 89002, 2020 WL 3030497 (June 4, 2020).
"A___" refers to the relevant record documents in the appendix to this motion. The record documents have been redacted to the extent that they contain information that could reasonably be expected to reveal the identity of the other individual whose whistleblower award claim was decided in the same order of the Commission. See 15 U.S.C. § 78u-6(h)(2)(A). The redactions do not remove information essential to the Court's consideration of Herber's petition.
II. The Commission's proceeding against The Bank of New York MellonOn June 13, 2016, the Commission issued an order instituting a settled administrative proceeding against The Bank of New York Mellon. Bank of New York Mellon, Investment Company Act of 1940 Release No. 32151, 2016 WL 3345651 (June 13, 2016). In its order, the Commission alleged that from at least 2000 through at least August 2011, The Bank of New York Mellon and its predecessors (the "Bank") misled certain of its custodial clients, including certain registered investment company customers, by representing that foreign exchange execution would be provided according to "best execution standards" and at "best rates," when in fact the Bank priced these transactions near the end of the trading day or session at or near the worst interbank rates reported during that day or session. Id. at *1. This resulted in substantial revenues to the Bank based on the difference between the rates that the Bank assigned to its clients and the rates that it obtained on its own behalf. Id. Moreover, the Bank failed to disclose either the time of the transactions or the manner of pricing in the trade confirmations and transaction reports it provided to these clients. Id. at *2. To settle the Commission's proceeding, the Bank agreed, among other things, to pay roughly $133 million in disgorgement plus prejudgment interest, to be deemed satisfied by the Bank's payment of an equivalent amount in settlement of related actions brought by the U.S. Department of Justice and the New Case: 20-2174 Document: 7 Filed: 08/20/2020 Pages: 114 6 York Attorney General. Id. at *6. The Bank also agreed to pay the Commission a civil penalty of $30 million. Id.6III. Herber's whistleblower award claim
On July 29, 2016, the Commission's Office of the Whistleblower published Notice of Covered Action 2016-86 concerning the Bank of New York Mellon proceeding on the Commission's public website and invited claimants to submit whistleblower award applications based on that proceeding within 90 days, by October 27, 2016. A1-3. The Office of the Whistleblower received Herber's award claim for Notice of Covered Action 2016-86 nearly ten months after that deadline, on August 23, 2017. A35 ¶7. Herber later submitted an amended application that also claimed an award in connection with the related actions brought by the U.S. Department of Justice and the New York Attorney General. A5-22. In his application, Herber admitted that he did "not remember if [he] filed a whistleblower complaint with the SEC," but he asserted that he had provided information concerning the Bank to the U.S. Attorney's Office for the Southern District of New York. A16. . . .