The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
June 15, 2021
All Along the Watchtower FINRA Defends Against the Invading Notaries (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/5905/finra-awc-notary/
Some say that FINRA stands all along the watchtower and protects the investing public from the oncoming hordes of Wall Street. Some say that FINRA is perched atop the castle walls, enjoying a smoke of a dubious substance, sippin' a glass of wine, and mesmerized by the sunset. Others say that FINRA had some other regulator punch in for them and blew off the whole standing on the bulwarks thing. In any event, today's blog features yet another example of FINRA discharging its role as the protector of the realm. We don't have raging hordes threatening to storm the castle. No, today's attackers are from the fearsome tribe of the Notaries. And as the joker said to the thief, there's too much confusion and I can't get no relief.
Order Determining Whistleblower Award Claim ('34 Act Release No. 34-92163; Whistleblower Award Proc. File No. 2021-59)
https://www.sec.gov/rules/other/2021/34-92163.pdf
The SEC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending a Whistleblower Award to Claimant 1 and Claimant 2 in the amount of about $3 million based upon anticipated future collections. The Commission ordered that Claimants' applications be approved. The Order asserts in part that:
[I]n reaching that determination with regard to Claimant 1, we considered that Claimant 1 provided Enforcement staff with assistance early in the investigation and helped the staff focus its resources and theories. In reaching that determination with regard to Claimant 2, we considered that Claimant 2 helped Enforcement staff uncover misappropriated funds and fraudulent transfers. Both Claimant 1 and Claimant 2 provided ongoing assistance to Enforcement staff through multiple interviews and document productions. Based on the facts and circumstances of this matter, we believe that a *** % whistleblower award to Claimant 1 and a *** % whistleblower award to Claimant 2 would recognize the independent significance of the assistance of Claimant 1's and Claimant 2's information and the high law enforcement interest involved in this matter.
Order Determining Whistleblower Award Claim ('34 Act Release No. 34-92164; Whistleblower Award Proc. File No. 2021-60)
https://www.sec.gov/rules/other/2021/34-92164.pdf
The SEC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending a Whistleblower Award to Claimant 1 of 28% of monetary sanctions as collected, and to Claimant 2 of 2% of the monetary sanctions as collected. The Order applied the "30% presumption" for the statutory award based upon considerations that the Award would be less than $5 million. The Commission ordered that Claimants' applications be approved. The Order asserts in part that:
[C]laimant 1's award application presents no negative award factors, as Claimant 1 was not culpable, did not unreasonably delay in reporting the wrongdoing, and did not interfere with any internal compliance or reporting system. In addition, the presumption of a maximum award should not be departed from because Claimant 1 provided substantial assistance and the maximum award would not be inconsistent with the public interest, protection of investors, or the objectives of the whistleblower program.
In determining that Claimant 1 should receive an award of 28% of any monetary sanctions collected or to be collected in the Covered Action, we considered that Claimant 1 alerted government authorities to the underlying misconduct first, resulting in the opening of the investigation; Claimant 1 provided significant new information that made a substantial and important contribution to the success of the Covered Action; and Claimant 1 provided substantial and continuing assistance during the investigation and litigation that helped stop a fraudulent scheme preying on investors. In determining that Claimant 2 should receive a smaller award percentage, we considered that Claimant 2 provided the information after a period of delay, that much of the information Claimant 2 provided was already known to the Commission because of information previously provided by Claimant 1, and Claimant 2's new, helpful information was limited in nature.