violations from the Commission rather than from internal
whistleblowing; (ii) increased defense and litigation costs in
responding to Commission enforcement proceedings from, among other
things, non-meritorious whistleblower complaints that could have been
resolved internally; (iii) increased harm to entities and investors
when non-securities law violations go unreported to the entity. These
commenters did not provide us with projections or estimations regarding
either the degree to which whistleblowers would likely be diverted from
internal reporting under our proposed rule, or the resulting costs to
companies or other entities.\452\
---------------------------------------------------------------------------

    \451\ See, e.g., letters from CAQ, Edison and GE Group. See also
letter from the CCMC (``In the absence of an affirmative restriction
on external reporting when effective internal compliance channels
are available, or provision of significant incentive for using those
internal channels, employees will face an irresistible temptation to
go to the SEC with their report.'').
    \452\ We do note, however, that other commenters provided some
evidence to counter the assertion that whistleblowers would be
diverted from reporting internally in significant numbers. For
example, one commenter cited an empirical study of the False Claims
Act (FCA)--which requires no mandatory internal reporting--stating
that ``the overwhelming majority of employees voluntarily utilize
internal reporting processes, despite the fact that they were
potentially eligible for a large reward under the FCA.'' Letter from
NWC at 4. This study claims that ``89.7 percent of employees who
eventually filed False Claims Act cases had made an internal report,
despite the absence of a legal requirement that they do so.'' See
supra discussion in footnote 232. See also letter from TAF at 22
(``[I]t is our membership's experience that the vast majority of
whistleblowers do, in fact, report their concerns first to either
their superiors or compliance officers, and only avail themselves of
statutory whistleblower programs when their concerns have been
dismissed or unaddressed, or when they suffer retaliation.'')
(emphasis in original). See generally Aaron S. Kesselheim et al.,
Whistle-Blowers' Experiences in Fraud Litigation Against
Pharmaceutical Companies, 362 New England J. Med. 1832, 1834 & 1836
(2010) (a study of qui tam cases involving pharmaceutical companies
that showed ``[n]early all (18 of 22) insiders first tried to fix
matters internally by talking to their superiors, filing an internal
complaint, or both'' despite the fact that the ultimate monetary
awards from external reporting were large, ranging from $100,000 to
$42 million, with a median of $3 million.''); id. at 1839
(discussing possible limitations with the study).
---------------------------------------------------------------------------

    Analysis of the academic literature, although not wholly
conclusive, provides reason to believe that a sizable percentage of
whistleblowers who currently report internally are motivated

by non-monetary reasons.\453\ Thus, we anticipate that many
whistleblowers would continue to report internally.
---------------------------------------------------------------------------

    \453\ Whistleblowers are often willing to report notwithstanding
the absence of financial incentives and the potential for costs to
them in terms of time, money, social stigma, and a possible job
loss. Non-monetary incentives that often motivate individuals to
whistleblow include: (i) Cleansing the conscience, (ii) punishing
wrongdoers (in some cases out of spite), (iii) simply ``doing the
right thing'' for the sake of a general increase in social welfare,
or (iv) motive for self-preservation. See Anthony Heyes & Sandeep
Kapur, An Economic Model of Whistleblower Policy, 25 J. L. Econ. &
Org. 157, 159 (2009) (providing a short review of academic
literature on sociology and psychology and listing non-monetary
motives for whistleblowing); see also Aaron S. Kesselheim et al.,
Whistle-Blower's Experience in Fraud Litigation Against
Pharmaceutical Companies, 362 New England J. Med. 1832, 1834 (2010)
(listing as primary motivations for qui tam lawsuit self-
preservation, justice, integrity, altruism or public safety) (cited
by letter from NWC). Research has also shown that the likelihood of
internal whistleblowing increases when ethical and legal compliance
policies exist in an organization, particularly if specific
whistleblowing procedures are in place. Richard E. Moberly,
Sarbanes-Oxley's Structural Model to Encourage Corporate
Whistleblowers, 2006 B.Y.U. L. Rev. 1107, 1142-43 (2006) (``A
disclosure channel also harmonizes with a whistleblower's tendency
to report misconduct internally--by this sense of loyalty. * * *
[Internal reporting] fits well with the psyche of the American
employee, whose sense of loyalty to the organization keeps her from
reporting misconduct externally, but who may report internally if
encouraged by the organization.'') (cited in letter from CCMC).
---------------------------------------------------------------------------

    Nonetheless, we recognize that there could be a sizeable percentage
of whistleblowers who, under our rules, could now be more motivated to
report to the Commission in lieu of reporting internally because of the
financial incentives created by the whistleblower program. In response
to this possibility, we have tailored the final rules to provide
whistleblowers who are otherwise pre-disposed to report internally, but
who may also be affected by financial incentives, with additional
economic incentives to continue to report internally. The final rules
provide that a whistleblower who reports internally can collect a
whistleblower award from the Commission if his internal report to the
company or entity results in a successful covered action. In addition,
the final rules provide that when determining the amount of an award,
the Commission will consider as a plus-factor the whistleblower's
participation in an entity's internal compliance procedures.
    We believe these provisions should substantially reduce the degree
of diversion of whistleblower reporting from companies. Assuming that
some significant percentage of whistleblowers who were pre-disposed to
report internally prior to the whistleblower program are inclined to
change their behavior in response to financial incentives, these
provisions should mitigate any diversion effect. These provisions do so
by providing that an internal report can be an additional path to a
whistleblower award. Indeed, to the extent that this sub-set of
potential whistleblowers is responsive to economic incentives, they
should be motivated to report internally by the final rules because by
doing so they can increase both the probability and the magnitude of a
potential recovery. Specifically, if they submit their tip internally,
and either simultaneously or within 120 days make the same submission
to the Commission, it is conceivable that they can increase the
probability of an award because they now have two paths to a recovery--
a Commission investigation, or an internal corporate investigation.
They can increase the magnitude of a potential award because of the
award criteria that provides a plus-factor for participation in an
entity's internal compliance procedures.\454\
---------------------------------------------------------------------------

    \454\ We believe that the final rules' financial incentives to
report internally should be particularly attractive to
whistleblowers who may be uncertain that their information is
sufficiently compelling to cause the Commission staff to open an
investigation. Where this is the case, whistleblowers may reasonably
view internal compliance as the more likely path for an eventual
award on the belief that an effective internal compliance process
will investigate the information.
---------------------------------------------------------------------------

    These additional financial incentives for whistleblowers to report
internally should make it less likely that significant numbers of tips
will be diverted from internal reporting.\455\ This in turn should
mitigate companies' costs from lost internal whistleblower reports.
Moreover, while some whistleblower tips may nonetheless be diverted to
the Commission,\456\ any decrease in internal reporting should be
offset at least in part by the fact that our final rules will
incentivize other individuals who might not have reported internally
prior to the whistleblower program to do so now. The financial
incentives offered by the final rules to report internally should
induce individuals to report who, absent any financial incentive, would
never have reported either internally or to the Commission.\457\ As a
result, companies and other entities should now receive some
information related to possible violations that they would not have
otherwise received, which in turn may allow these entities to stop on-
going violations, thereby limiting the harm to the entities and
investors sooner than might otherwise have been the case.
---------------------------------------------------------------------------

    \455\ A commenter suggested that some whistleblowers could still
decline to report a violation internally based on the strategic
calculation that the company could reduce the monetary sanctions
through remediation, self-reporting, cooperation, etc., which in
turn might reduce the whistleblower's award. See letter from CCMC.
Although the commenter provided neither anecdotal nor empirical
evidence to support this proposition, we think the incidence of this
(if it should occur) would be relatively small for several reasons.
Cf. letter from NWC at 7. First, no whistleblower can safely assume
that his decision to bypass internal compliance will in fact lead to
larger monetary sanctions. We will make our own assessment of the
circumstances--indeed, as noted at pp. 92, sometimes our first step
will be to contact the company--and good cooperation by the company
overall, even in response to contact from the Commission staff,
might mean that the monetary sanctions will not be any greater than
if the whistleblower had simultaneously reported internally. Second,
various factors in Rule 21F-6 allow us to account for a reduced
monetary sanction by providing for an upward adjustment in the award
determination where the internal reporting potentially resulted in a
lower monetary sanction. Finally, to the extent there is any impact
on whistleblower behavior, we believe it will generally mean that
whistleblowers decide to report simultaneously, rather than availing
themselves of the 120-day look-back period, out of concern that the
latter course might afford companies an increased opportunity to
take actions that could possibly result in a reduced monetary
sanction.
    \456\ For example, we recognize that, notwithstanding the strong
financial incentives to report internally, whistleblowers may bypass
internal compliance procedures in cases involving clear fraud or
other instances of serious securities law violations by senior
management. In these cases, however, we believe the benefits of
coming to the Commission, both in terms of our enforcement efforts
and in terms of investors' interests, will often be quite
significant, so as to justify any potential costs to the entity.
    \457\ See Elletta Sanrey Callahan & Terry Morehead Dworkin, Do
Good and Get Rich: Financial Incentives for Whistleblowing and the
False Claims Act, 37 Vill. L. Rev. 273, 284 (finding that ``money
rewards for whistleblowing may produce the desired result of
increasing the number of individuals willing to report activity''
and stating that ``financial incentives should encourage a new type
of whistleblower to step forward''). See generally Geoffrey
Christopher Rapp, Beyond Protection: Invigorating Incentives for
Sarbanes-Oxley Corporate and Securities Fraud Whistleblowers, 87
Boston Univ. L. Rev. 91, 118-26 (2007) (discussing reasons that
insiders may not report information about ongoing corporate and
financial fraud in the absence of significant financial incentives
to do so).
---------------------------------------------------------------------------

    In addition to considering the benefits and costs of the final
rules on companies and other entities, we considered the benefits and
costs of the final rules on our own enforcement program. As we stated
in our proposing release, internal reporting to effective compliance
programs can provide valuable assistance to our own enforcement
efforts. By providing a strong financial incentive for whistleblower to
report internally when appropriate, we are leveraging the Investor
Protection Fund established by Section 21F of the Exchange Act to
obtain the benefit of effective internal compliance programs that can
respond to whistleblower tips by, among other

things, undertaking prompt investigations that can lead to timely,
well-documented reports of violations to the Commission.
    As alternatives to the significant incentives approach that we have
adopted, we considered the suggestions from commenters that we adopt
some form of a mandatory internal reporting requirement as a condition
on whistleblowers for award eligibility. Such an approach could take
the following forms: (1) Mandatory internal pre-reporting, where the
whistleblower's eligibility would be conditioned on his first making a
report internally and providing the company's internal compliance
function a meaningful period of time to respond; or (2) mandatory
simultaneous reporting, under which the whistleblower's eligibility is
conditioned upon a simultaneous report to internal compliance and the
Commission. We evaluated these alternatives by analyzing how
whistleblowers' expected behavior might change relative to the
significant incentives approach adopted in the final rules, and what
those changes might mean for the resulting costs and benefits to
companies as well as the Commission's enforcement efforts.
    We believe that either a mandatory pre-reporting or a simultaneous
reporting requirement would not achieve an appreciable cost-benefit
advantage over the approach we are adopting, and indeed a mandatory
internal reporting requirement could be less advantageous because it
could result in less overall whistleblowing. With respect to those
whistleblowers who are already pre-disposed to report internally, a
mandatory internal reporting requirement should have little or no net
difference from the significant financial incentives approach that we
are adopting.\458\ To the extent that these whistleblowers respond to
the financial incentives of a potential whistleblower award, we would
expect them to report internally under a mandatory internal reporting
requirement to be eligible for a whistleblower award from us, or to
report internally under our final rules so as to seek to increase the
probability and magnitude of any potential award.
---------------------------------------------------------------------------

    \458\ Some commenters suggested that a mandatory internal pre-
reporting requirement could reduce the Commission's cost of
information processing by filtering out frivolous or low quality
tips from being submitted to us. See Americans for Limited
Government. However, we believe other mechanisms in the final rules
are reasonably designed to discourage frivolous submissions and thus
reduce the attendant costs. See supra discussion in Parts IV.A (1)-
(2).
---------------------------------------------------------------------------

    The most likely difference between a mandatory regime and the
significant financial incentives approach is with respect to the
category of whistleblowers who, prior to the whistleblower award
program, were not predisposed to report either internally or to the
Commission, but who are now willing to come forward in response to a
financial inducement. Within this category of whistleblowers, we
believe there is some subset who would respond to the financial
incentive offered by our final rules by reporting only to us, but who
would not come forward either to us or to the entity if the financial
incentive were coupled with a mandatory internal reporting
requirement.\459\ Requiring internal reporting would have several
adverse consequences: The Commission would lose critical information
about some possible securities law violations, and companies and
investors in turn would suffer as on-going violations remained
undetected and unremedied.\460\
---------------------------------------------------------------------------

    \459\ We believe that the fear of retaliation and other forms of
harassment, as well as other social and psychological factors, can
have a chilling effect on certain whistleblowers who, absent a
mandatory internal reporting requirement, would respond to the
financial incentive offered by the whistleblower program by
providing the Commission with information about possible securities
law violations. A number of commenters who have experience dealing
with whistleblowers support this assessment. See, e.g., letters from
TAF at 21-23 (Dec. 17, 2010); POGO at 4-5 (Dec. 17, 2010); Grohovsky
Group at 4 (Dec. 16, 2010). Our review of the academic literature
further supports this assessment. See generally Luigi Zingales, Want
to Stop Corporate Fraud? Pay Off Those Whistle-Blowers, AEI-
Brookings Joint Center Policy Matters (January 18, 2004); Geoffrey
Christopher Rapp, Beyond Protection: Invigorating Incentives for
Sarbanes-Oxley Corporate and Securities Fraud Whistleblowers, 87
Boston Univ. L. Rev. 91; Pamela H. Bucy, Information as a Commodity
in the Regulatory World, 39 Hous. L. Rev. 905, 948-959; Aaron S.
Kesselheim et al., Whistle-Blowers' Experiences in Fraud Litigation
Against Pharmaceutical Companies, 362 New England J. Med. 1832, 1834
(2010); see also Letter from Eric Dixon LLC (Dec. 19, 2010)
(``[W]histleblowers expose them[selves] to serious risk, including
harm to them and their families, professional or career reprisals
and community ostracization. Whistleblowers may also face
retaliation from alleged wrongdoers or their associates, including
civil suits'').
    \460\ There are additional costs that could follow from a
mandatory internal pre-reporting requirement where the company or
entity's internal compliance process is ineffective and thus
unlikely to respond properly to the violation. In these situations,
the mandatory internal pre-reporting requirement would result in
delays before the violation can be addressed by the Commission,
resulting in potentially increased injuries to the company and
investors. See letter from CCMC at 6 (``Of course, when internal
reporting systems are nonexistent or illusory, it is appropriate and
beneficial for employees to report information of wrongdoing
directly to the SEC.''). In other cases, mandatory internal
reporting could result in spoliation or other interference with our
ability to investigate.
---------------------------------------------------------------------------

    Finally, we have considered the alternative of mandating that a
whistleblower report internally within a specified period of time after
reporting to us, unless upon reviewing the submission we direct the
whistleblower not to report internally. Conceptually, this approach
could allow the Commission an opportunity to review a whistleblower's
submission and direct him not to report internally in situations where,
among other things, (i) we identify a basis to believe that he might in
fact suffer retaliation, or (ii) there would be no benefit to reporting
internally either because the entity might engage in a cover-up or the
internal compliance program is ineffective. This approach could
encourage some whistleblowers who might otherwise be discouraged from
reporting to us under a pure mandatory reporting regime because these
whistleblowers could perceive an opportunity to persuade the Commission
that they should be excused from making the mandatory internal
report.\461\
---------------------------------------------------------------------------

    \461\ We believe that many whistleblowers would still elect not
to participate in the whistleblower program because of the
uncertainty ahead of time regarding whether we would tell them not
to report internally. As a result, we believe that it remains the
case even under this approach that many whistleblowers would not
report possible securities law violations to us due to the internal
reporting requirement, and thus on-going violations would continue
undetected resulting in further harms to entities and investors.
---------------------------------------------------------------------------

    Notwithstanding this potential benefit, however, we do not believe
that this approach would have any significant cost-benefit advantage
over the approach that we have adopted. In fact, this alternative
approach would have significant disadvantages over the adopted rules.
Simply put, for this approach to operate effectively and efficiently,
the Commission would need to be in a position to meaningfully assess
within a very short time--likely a few weeks--whether a whistleblower
should be excused from reporting internally. However, the Commission is
not in a position to make the necessary fact-intensive assessments
identified above in a considered and reliable manner, especially within
this short time frame.\462\ Moreover, this could

divert limited resources from the primary objective of investigating
allegations of wrongdoing.
---------------------------------------------------------------------------

    \462\ In contrast to any of the alternative mandatory reporting
regimes, we believe that the financial incentives approach has the
additional advantage that it allows whistleblowers to select the
proper reporting procedures under the specific circumstances.
Whistleblowers can balance the potential increase in the probability
and magnitude of an award by participating in an effective internal
compliance mechanism, against the particular risks that may result
from doing so, which could include retaliation, loss of anonymity
(for those companies that may not have effective anonymous reporting
procedures), delay due to an ineffective or questionable internal
compliance mechanism, and destruction of evidence based on the
nature of the allegations or the corporate environment. On balance,
we believe that, from a law-enforcement perspective, overall
efficiency is better promoted by allowing whistleblowers to make
this assessment on a case-by-case basis.
---------------------------------------------------------------------------

    As stated earlier, Congress did not include an internal reporting
requirement in the statute, which is modeled upon the DOJ and IRS
whistleblower program.\463\ Instead, Congress enacted a requirement
that provides financial incentives and employment retaliation
protections for reporting directly to the Commission. Internal
compliance programs are valuable, and under appropriate circumstances,
these rules provide financial encouragement for whistleblowers to
utilize those programs. At the same time, however, internal compliance
programs cannot serve as adequate substitutes for our obligation to
identify and remedy violations of the Federal securities laws. In
addition, there are circumstances where whistleblowers may have
legitimate reasons for not wanting to report information internally,
even if the company provides an avenue for anonymous reporting. For
these reasons, the adopted approach encourages the whistleblower to
report allegations internally, yet ultimately and appropriately leaves
that decision to the whistleblower.
---------------------------------------------------------------------------

    \463\ See S. Rep. No. 111-176 at 111 (2010).
---------------------------------------------------------------------------

B. Additional Considerations of Competition, Efficiency, and Capital
Formation

    Section 23(a)(2) \464\ of the Securities Exchange Act of 1934
requires the Commission, in promulgating rules under the Exchange Act,
to consider the impact that any rule may have on competition and
prohibits the Commission from adopting any rule that would impose a
burden on competition not necessary or appropriate in furtherance of
the purposes of the Exchange Act. Further, Section 3(f) of the Exchange
Act \465\ requires the Commission, when engaging in rulemaking where it
is required to consider or determine whether an action is necessary or
appropriate in the public interest, to consider, in addition to the
protection of investors, whether the action will promote efficiency,
competition, and capital formation.
---------------------------------------------------------------------------

    \464\ 15 U.S.C. 78w(a)(2).
    \465\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    We expect that the impact of the final rules on capital formation
and efficiency will be generally positive. As discussed above, the
final rules are structured to encourage the submission of more
actionable information both to the Commission and to internal
compliance programs regarding possible securities law violations. This
will have several positive effects on capital formation. First, to the
extent that more effective enforcement leads to earlier detection of
violations and increased deterrence of potential future violations,
this should assist in a more efficient allocation of investment funds.
Serious securities frauds, for example, can cause inefficiencies in the
economy by diverting investment funds from more legitimate, productive
uses. Second, the deterrent effect of our rules should result in a
higher level of investors' trust in the securities markets. We believe
that this increased investor trust in the fairness of the market will
promote lower capital costs as more investment funds enter the market,
and as investors generally demand a lower risk premium due to a reduced
likelihood of securities fraud.\466\ This, too, should promote the
efficient allocation of capital formation.
---------------------------------------------------------------------------

    \466\ If investors fear theft, fraud, manipulation, insider
trading, or conflicted investment advice, their trust in the markets
will be low, both in the primary market for issuance or in the
secondary market for trading. This would increase the cost of
raising capital, which would impair capital formation--in the sense
that it will be less than it would or should be if rules against
such abuses were in effect and properly enforced and obeyed.
---------------------------------------------------------------------------

    In addition, there will be certain gains and losses in efficiency
due to our rules, most of which were discussed in our cost-benefit
analysis. As stated above, we believe that the final rules, by
encouraging internal reporting without mandating it, allow
whistleblowers to balance the potential increase in the probability and
magnitude of an award by participating in an effective internal
compliance mechanism against the particular risks that may result from
doing so. By allowing potential whistleblowers to make this assessment
and encouraging them to report internally in situations where their
tips will be appropriately addressed, the final rules should promote
efficiency in how violations are reported and resolved. Furthermore,
issuers who previously may have underinvested in internal compliance
programs may respond to our rules by making improvements in corporate
governance generally,\467\ and strengthening their internal compliance
programs in particular. While these improvements will involve costs on
companies, there should be an overall increased efficiency from the
perspective of investors to the extent that these companies achieve a
more optimal investment in these programs.
---------------------------------------------------------------------------

    \467\ See Robert M. Bowen et al., ``Whistle-Blowing: Target Firm
Characteristics and Economic Consequences,'' working paper (2009) at
29, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=890750 (cited in letter from CCMC) (documenting that firms
respond to external whistleblowing with subsequent governance
changes).
---------------------------------------------------------------------------

    We do not believe the final rules will impose undue burdens on
competition and, indeed, we believe the rules may have a potential pro-
competitive effect. Specifically, by increasing the likelihood that
misconduct will be detected, of securities law violations, the rules
should reduce the unfair competitive advantages that some companies can
achieve by engaging in undetected violations.
    We are aware of the possible concern that smaller companies may
bear a disproportionately greater cost under the final rules than
larger companies. We do not believe this is likely for several reasons,
however. First, we believe that the relative likelihood that any
particular employee will blow the whistle on a possible violation
should not significantly vary between smaller and larger companies, and
thus we believe that the incidence of whistleblowing and the resulting
costs borne by companies should be relatively consistent on a per-
employee basis irrespective of a company's size. Second, because the
final rules do not dictate the structure of effective compliance
processes for internal reporting by employees under Rule 21F-4(c)(iii),
including allowing companies to utilize upward reporting practices, we
believe that companies of all sizes should be able to design cost-
effective processes that meet their particular needs based on company
size and structure. Overall, we do not believe these effects will
result in undue burdens on competition.

V. Regulatory Flexibility Act Certification

    In our proposing release, we certified that a regulatory
flexibility analysis is not required because the persons that would be
subject to the rules--individuals--are not ``small entities'' for
purposes of the Regulatory Flexibility Act and the rules therefore
would not have a significant economic impact on a substantial number of
small entities. One commenter disagreed with this conclusion,
contending that our proposal not to require mandatory internal
reporting will cause small businesses to experience significant costs
and disruptions.\468\ Notwithstanding the possibility of such indirect
impacts, we disagree with the comment's conclusion that this means a

Regulatory Flexibility Act analysis is required. These rules do not
directly affect or impose responsibilities on small entities.\469\
---------------------------------------------------------------------------

    \468\ See letter from Association for Corporate Counsel.
    \469\ In advancing the argument, the commenter relies on
Aeronautical Repair Station Association v. Federal Aviation
Administration, 494 F.3d 161 (DC Cir. 2007). This case is
inapposite, however, because there the agency's own rulemaking
release expressly stated that the rule imposed responsibilities
directly on certain small business contractors. The court reaffirmed
its prior holdings that the Regulatory Flexibility Act limits its
application to small entities ``which will be subject to the
proposed regulation--that is, those small entities to which the
proposed rule will apply.'' Id. at 176 (emphasis and internal
quotations omitted). See also Cement Kiln Recycling Coal v. EPA, 255
F. 3d 855, 869 (DC Cir. 2001).
---------------------------------------------------------------------------

VI. Statutory Authority

    The Commission is adopting rules and forms contained in this
document under the authority set forth in Sections 3(b), 21F and 23(a)
of the Exchange Act.

List of Subjects in 17 CFR Parts 240 and 249

    Securities.

Text of the Amendments

    In accordance with the foregoing, Title 17, Chapter II of the Code
of Federal Regulations is amended as follows.

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

0
1. The authority citation for part 240 is amended by adding the
following citation in numerical order to read as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78-i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4, 78p, 78q,
78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37,
80b-3, 80b-4, 80b-11, and 7201 et seq.; 18 U.S.C. 1350; and 12
U.S.C. 5221(e)(3), unless otherwise noted.
* * * * *
    Section 240.21F is also issued under Pub. L. 111-203, Sec.
922(a), 124 Stat. 1841 (2010).
* * * * *

0
2. Add an undesignated center heading and Sec. Sec.  240.21F-1 through
Sec.  240.21F-17 to read as follows:

Securities Whistleblower Incentives and Protections

Sec.
240.21F-1 General.
240.21F-2 Whistleblower status and retaliation protections.
240.21F-3 Payment of award.
240.21F-4 Other definitions.
240.21F-5 Amount of award.
240.21F-6 Criteria for determining amount of award.
240.21F-7 Confidentiality of submissions.
240.21F-8 Eligibility.
240.21F-9 Procedures for submitting original information.
240.21F-10 Procedures for making a claim for a whistleblower award
in SEC actions that result in monetary sanctions in excess of
$1,000,000
240.21F-11 Procedures for determining awards based upon a related
action.
240.21F-12 Materials that may be used as the basis for an award
determination and that may comprise the record on appeal.
240.21F-13 Appeals.
240.21F-14 Procedures applicable to the payment of awards.
240.21F-15 No amnesty.
240.21F-16 Awards to whistleblowers who engage in culpable conduct.
240.21F-17 Staff communications with individuals reporting possible
securities law violations.
* * * * *

Sec.  240.21F-1  General.

    Section 21F of the Securities Exchange Act of 1934 (``Exchange
Act'') (15 U.S.C. 78u-6), entitled ``Securities Whistleblower
Incentives and Protection,'' requires the Securities and Exchange
Commission (``Commission'') to pay awards, subject to certain
limitations and conditions, to whistleblowers who provide the
Commission with original information about violations of the Federal
securities laws. These rules describe the whistleblower program that
the Commission has established to implement the provisions of Section
21F, and explain the procedures you will need to follow in order to be
eligible for an award. You should read these procedures carefully
because the failure to take certain required steps within the time
frames described in these rules may disqualify you from receiving an
award for which you otherwise may be eligible. Unless expressly
provided for in these rules, no person is authorized to make any offer
or promise, or otherwise to bind the Commission with respect to the
payment of any award or the amount thereof. The Securities and Exchange
Commission's Office of the Whistleblower administers our whistleblower
program. Questions about the program or these rules should be directed
to the SEC Office of the Whistleblower, 100 F Street, NE., Washington,
DC 20549-5631.

Sec.  240.21F-2  Whistleblower status and retaliation protection.

    (a) Definition of a whistleblower. (1) You are a whistleblower if,
alone or jointly with others, you provide the Commission with
information pursuant to the procedures set forth in Sec.  240.21F-9(a)
of this chapter, and the information relates to a possible violation of
the Federal securities laws (including any rules or regulations
thereunder) that has occurred, is ongoing, or is about to occur. A
whistleblower must be an individual. A company or another entity is not
eligible to be a whistleblower.
    (2) To be eligible for an award, you must submit original
information to the Commission in accordance with the procedures and
conditions described in Sec. Sec.  240.21F-4, 240.21F-8, and 240.21F-9
of this chapter.
    (b) Prohibition against retaliation: (1) For purposes of the anti-
retaliation protections afforded by Section 21F(h)(1) of the Exchange
Act (15 U.S.C. 78u-6(h)(1)), you are a whistleblower if:
    (i) You possess a reasonable belief that the information you are
providing relates to a possible securities law violation (or, where
applicable, to a possible violation of the provisions set forth in 18
U.S.C. 1514A(a)) that has occurred, is ongoing, or is about to occur,
and;
    (ii) You provide that information in a manner described in Section
21F(h)(1)(A) of the Exchange Act (15 U.S.C. 78u-6(h)(1)(A)).
    (iii) The anti-retaliation protections apply whether or not you
satisfy the requirements, procedures and conditions to qualify for an
award.
    (2) Section 21F(h)(1) of the Exchange Act (15 U.S.C. 78u-6(h)(1)),
including any rules promulgated thereunder, shall be enforceable in an
action or proceeding brought by the Commission.

Sec.  240.21F-3  Payment of awards.

    (a) Commission actions: Subject to the eligibility requirements
described in Sec. Sec.  240.21F-2, 240.21F-8, and 240.21F-16 of this
chapter, the Commission will pay an award or awards to one or more
whistleblowers who:
    (1) Voluntarily provide the Commission
    (2) With original information
    (3) That leads to the successful enforcement by the Commission of a
Federal court or administrative action
    (4) In which the Commission obtains monetary sanctions totaling
more than $1,000,000.

    Note to paragraph (a): The terms voluntarily, original
information, leads to successful enforcement, action, and monetary
sanctions are defined in Sec.  240.21F-4 of this chapter.

    (b) Related actions: The Commission will also pay an award based on
amounts collected in certain related actions.
    (1) A related action is a judicial or administrative action that is
brought by:
    (i) The Attorney General of the United States;

    (ii) An appropriate regulatory authority;
    (iii) A self-regulatory organization; or
    (iv) A state attorney general in a criminal case, and is based on
the same original information that the whistleblower voluntarily
provided to the Commission, and that led the Commission to obtain
monetary sanctions totaling more than $1,000,000.

    Note to paragraph (b)(1): The terms appropriate regulatory
authority and self-regulatory organization are defined in Sec.
240.21F-4 of this chapter.

    (2) In order for the Commission to make an award in connection with
a related action, the Commission must determine that the same original
information that the whistleblower gave to the Commission also led to
the successful enforcement of the related action under the same
criteria described in these rules for awards made in connection with
Commission actions. The Commission may seek assistance and confirmation
from the authority bringing the related action in making this
determination. The Commission will deny an award in connection with the
related action if:
    (i) The Commission determines that the criteria for an award are
not satisfied; or
    (ii) The Commission is unable to make a determination because the
Office of the Whistleblower could not obtain sufficient and reliable
information that could be used as the basis for an award determination
pursuant to Sec.  240.21F-12(a) of this chapter. Additional procedures
apply to the payment of awards in related actions. These procedures are
described in Sec. Sec.  240.21F-11 and 240.21F-14 of this chapter.
    (3) The Commission will not make an award to you for a related
action if you have already been granted an award by the Commodity
Futures Trading Commission (``CFTC'') for that same action pursuant to
its whistleblower award program under Section 23 of the Commodity
Exchange Act (7 U.S.C. 26). Similarly, if the CFTC has previously
denied an award to you in a related action, you will be precluded from
relitigating any issues before the Commission that the CFTC resolved
against you as part of the award denial.

Sec.  240.21F-4  Other definitions.

    (a) Voluntary submission of information. (1) Your submission of
information is made voluntarily within the meaning of Sec. Sec.
240.21F-1 through 240.21F-17 of this chapter if you provide your
submission before a request, inquiry, or demand that relates to the
subject matter of your submission is directed to you or anyone
representing you (such as an attorney):
    (i) By the Commission;
    (ii) In connection with an investigation, inspection, or
examination by the Public Company Accounting Oversight Board, or any
self-regulatory organization; or
    (iii) In connection with an investigation by Congress, any other
authority of the Federal government, or a state Attorney General or
securities regulatory authority.
    (2) If the Commission or any of these other authorities direct a
request, inquiry, or demand as described in paragraph (a)(1) of this
section to you or your representative first, your submission will not
be considered voluntary, and you will not be eligible for an award,
even if your response is not compelled by subpoena or other applicable
law. However, your submission of information to the Commission will be
considered voluntary if you voluntarily provided the same information
to one of the other authorities identified above prior to receiving a
request, inquiry, or demand from the Commission.
    (3) In addition, your submission will not be considered voluntary
if you are required to report your original information to the
Commission as a result of a pre-existing legal duty, a contractual duty
that is owed to the Commission or to one of the other authorities set
forth in paragraph (a)(1) of this section, or a duty that arises out of
a judicial or administrative order.
    (b) Original information. (1) In order for your whistleblower
submission to be considered original information, it must be:
    (i) Derived from your independent knowledge or independent
analysis;
    (ii) Not already known to the Commission from any other source,
unless you are the original source of the information;
    (iii) Not exclusively derived from an allegation made in a judicial
or administrative hearing, in a governmental report, hearing, audit, or
investigation, or from the news media, unless you are a source of the
information; and
    (iv) Provided to the Commission for the first time after July 21,
2010 (the date of enactment of the Dodd-Frank Wall Street Reform and
Consumer Protection Act).
    (2) Independent knowledge means factual information in your
possession that is not derived from publicly available sources. You may
gain independent knowledge from your experiences, communications and
observations in your business or social interactions.
    (3) Independent analysis means your own analysis, whether done
alone or in combination with others. Analysis means your examination
and evaluation of information that may be publicly available, but which
reveals information that is not generally known or available to the
public.
    (4) The Commission will not consider information to be derived from
your independent knowledge or independent analysis in any of the
following circumstances:
    (i) If you obtained the information through a communication that
was subject to the attorney-client privilege, unless disclosure of that
information would otherwise be permitted by an attorney pursuant to
Sec.  205.3(d)(2) of this chapter, the applicable state attorney
conduct rules, or otherwise;
    (ii) If you obtained the information in connection with the legal
representation of a client on whose behalf you or your employer or firm
are providing services, and you seek to use the information to make a
whistleblower submission for your own benefit, unless disclosure would
otherwise be permitted by an attorney pursuant to Sec.  205.3(d)(2) of
this chapter, the applicable state attorney conduct rules, or
otherwise; or
    (iii) In circumstances not covered by paragraphs (b)(4)(i) or
(b)(4)(ii) of this section, if you obtained the information because you
were:
    (A) An officer, director, trustee, or partner of an entity and
another person informed you of allegations of misconduct, or you
learned the information in connection with the entity's processes for
identifying, reporting, and addressing possible violations of law;
    (B) An employee whose principal duties involve compliance or
internal audit responsibilities, or you were employed by or otherwise
associated with a firm retained to perform compliance or internal audit
functions for an entity;
    (C) Employed by or otherwise associated with a firm retained to
conduct an inquiry or investigation into possible violations of law; or
    (D) An employee of, or other person associated with, a public
accounting firm, if you obtained the information through the
performance of an engagement required of an independent public
accountant under the Federal securities laws (other than an audit
subject to Sec.  240.21F-8(c)(4) of this chapter), and that information
related to a violation by the engagement client or the client's
directors, officers or other employees.

    (iv) If you obtained the information by a means or in a manner that
is determined by a United States court to violate applicable Federal or
state criminal law; or
    (v) Exceptions. Paragraph (b)(4)(iii) of this section shall not
apply if:
    (A) You have a reasonable basis to believe that disclosure of the
information to the Commission is necessary to prevent the relevant
entity from engaging in conduct that is likely to cause substantial
injury to the financial interest or property of the entity or
investors;
    (B) You have a reasonable basis to believe that the relevant entity
is engaging in conduct that will impede an investigation of the
misconduct; or
    (C) At least 120 days have elapsed since you provided the
information to the relevant entity's audit committee, chief legal
officer, chief compliance officer (or their equivalents), or your
supervisor, or since you received the information, if you received it
under circumstances indicating that the entity's audit committee, chief
legal officer, chief compliance officer (or their equivalents), or your
supervisor was already aware of the information.
    (vi) If you obtained the information from a person who is subject
to this section, unless the information is not excluded from that
person's use pursuant to this section, or you are providing the
Commission with information about possible violations involving that
person.
    (5) The Commission will consider you to be an original source of
the same information that we obtain from another source if the
information satisfies the definition of original information and the
other source obtained the information from you or your representative.
In order to be considered an original source of information that the
Commission receives from Congress, any other authority of the Federal
government, a state Attorney General or securities regulatory
authority, any self-regulatory organization, or the Public Company
Accounting Oversight Board, you must have voluntarily given such
authorities the information within the meaning of these rules. You must
establish your status as the original source of information to the
Commission's satisfaction. In determining whether you are the original
source of information, the Commission may seek assistance and
confirmation from one of the other authorities described above, or from
another entity (including your employer), in the event that you claim
to be the original source of information that an authority or another
entity provided to the Commission.
    (6) If the Commission already knows some information about a matter
from other sources at the time you make your submission, and you are
not an original source of that information under paragraph (b)(5) of
this section, the Commission will consider you an original source of
any information you provide that is derived from your independent
knowledge or analysis and that materially adds to the information that
the Commission already possesses.
    (7) If you provide information to the Congress, any other authority
of the Federal government, a state Attorney General or securities
regulatory authority, any self-regulatory organization, or the Public
Company Accounting Oversight Board, or to an entity's internal
whistleblower, legal, or compliance procedures for reporting
allegations of possible violations of law, and you, within 120 days,
submit the same information to the Commission pursuant to Sec.
240.21F-9 of this chapter, as you must do in order for you to be
eligible to be considered for an award, then, for purposes of
evaluating your claim to an award under Sec. Sec.  240.21F-10 and
240.21F-11 of this chapter, the Commission will consider that you
provided information as of the date of your original disclosure, report
or submission to one of these other authorities or persons. You must
establish the effective date of any prior disclosure, report, or
submission, to the Commission's satisfaction. The Commission may seek
assistance and confirmation from the other authority or person in
making this determination.
    (c) Information that leads to successful enforcement. The
Commission will consider that you provided original information that
led to the successful enforcement of a judicial or administrative
action in any of the following circumstances:
    (1) You gave the Commission original information that was
sufficiently specific, credible, and timely to cause the staff to
commence an examination, open an investigation, reopen an investigation
that the Commission had closed, or to inquire concerning different
conduct as part of a current examination or investigation, and the
Commission brought a successful judicial or administrative action based
in whole or in part on conduct that was the subject of your original
information; or
    (2) You gave the Commission original information about conduct that
was already under examination or investigation by the Commission, the
Congress, any other authority of the Federal government, a state
Attorney General or securities regulatory authority, any self-
regulatory organization, or the PCAOB (except in cases where you were
an original source of this information as defined in paragraph (b)(4)
of this section), and your submission significantly contributed to the
success of the action.
    (3) You reported original information through an entity's internal
whistleblower, legal, or compliance procedures for reporting
allegations of possible violations of law before or at the same time
you reported them to the Commission; the entity later provided your
information to the Commission, or provided results of an audit or
investigation initiated in whole or in part in response to information
you reported to the entity; and the information the entity provided to
the Commission satisfies either paragraph (c)(1) or (c)(2) of this
section. Under this paragraph (c)(3), you must also submit the same
information to the Commission in accordance with the procedures set
forth in Sec.  240.21F-9 within 120 days of providing it to the entity.
    (d) An action generally means a single captioned judicial or
administrative proceeding brought by the Commission. Notwithstanding
the foregoing:
    (1) For purposes of making an award under Sec.  240.21F-10 of this
chapter, the Commission will treat as a Commission action two or more
administrative or judicial proceedings brought by the Commission if
these proceedings arise out of the same nucleus of operative facts; or
    (2) For purposes of determining the payment on an award under Sec.
240.21F-14 of this chapter, the Commission will deem as part of the
Commission action upon which the award was based any subsequent
Commission proceeding that, individually, results in a monetary
sanction of $1,000,000 or less, and that arises out of the same nucleus
of operative facts.
    (e) Monetary sanctions means any money, including penalties,
disgorgement, and interest, ordered to be paid and any money deposited
into a disgorgement fund or other fund pursuant to Section 308(b) of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)) as a result of a
Commission action or a related action.
    (f) Appropriate regulatory agency means the Commission, the
Comptroller of the Currency, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office
of Thrift Supervision, and any other agencies that may be defined as
appropriate regulatory agencies under

Section 3(a)(34) of the Exchange Act (15 U.S.C. 78c(a)(34)).
    (g) Appropriate regulatory authority means an appropriate
regulatory agency other than the Commission.
    (h) Self-regulatory organization means any national securities
exchange, registered securities association, registered clearing
agency, the Municipal Securities Rulemaking Board, and any other
organizations that may be defined as self-regulatory organizations
under Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)).

Sec.  240.21F-5  Amount of award.

    (a) The determination of the amount of an award is in the
discretion of the Commission.
    (b) If all of the conditions are met for a whistleblower award in
connection with a Commission action or a related action, the Commission
will then decide the percentage amount of the award applying the
criteria set forth in Sec.  240.21F-6 of this chapter and pursuant to
the procedures set forth in Sec. Sec.  240.21F-10 and 240.21F-11 of
this chapter. The amount will be at least 10 percent and no more than
30 percent of the monetary sanctions that the Commission and the other
authorities are able to collect. The percentage awarded in connection
with a Commission action may differ from the percentage awarded in
connection with a related action.
    (c) If the Commission makes awards to more than one whistleblower
in connection with the same action or related action, the Commission
will determine an individual percentage award for each whistleblower,
but in no event will the total amount awarded to all whistleblowers in
the aggregate be less than 10 percent or greater than 30 percent of the
amount the Commission or the other authorities collect.

Sec.  240.21F-6  Criteria for determining amount of award.

    In exercising its discretion to determine the appropriate award
percentage, the Commission may consider the following factors in
relation to the unique facts and circumstances of each case, and may
increase or decrease the award percentage based on its analysis of
these factors. In the event that awards are determined for multiple
whistleblowers in connection an action, these factors will be used to
determine the relative allocation of awards among the whistleblowers.
    (a) Factors that may increase the amount of a whistleblower's
award. In determining whether to increase the amount of an award, the
Commission will consider the following factors, which are not listed in
order of importance.
    (1) Significance of the information provided by the whistleblower.
The Commission will assess the significance of the information provided
by a whistleblower to the success of the Commission action or related
action. In considering this factor, the Commission may take into
account, among other things:
    (i) The nature of the information provided by the whistleblower and
how it related to the successful enforcement action, including whether
the reliability and completeness of the information provided to the
Commission by the whistleblower resulted in the conservation of
Commission resources;
    (ii) The degree to which the information provided by the
whistleblower supported one or more successful claims brought in the
Commission or related action.
    (2) Assistance provided by the whistleblower. The Commission will
assess the degree of assistance provided by the whistleblower and any
legal representative of the whistleblower in the Commission action or
related action. In considering this factor, the Commission may take
into account, among other things:
    (i) Whether the whistleblower provided ongoing, extensive, and
timely cooperation and assistance by, for example, helping to explain
complex transactions, interpreting key evidence, or identifying new and
productive lines of inquiry;
    (ii) The timeliness of the whistleblower's initial report to the
Commission or to an internal compliance or reporting system of business
organizations committing, or impacted by, the securities violations,
where appropriate;
    (iii) The resources conserved as a result of the whistleblower's
assistance;
    (iv) Whether the whistleblower appropriately encouraged or
authorized others to assist the staff of the Commission who might
otherwise not have participated in the investigation or related action;
    (v) The efforts undertaken by the whistleblower to remediate the
harm caused by the violations, including assisting the authorities in
the recovery of the fruits and instrumentalities of the violations; and
    (vi) Any unique hardships experienced by the whistleblower as a
result of his or her reporting and assisting in the enforcement action.
    (3) Law enforcement interest. The Commission will assess its
programmatic interest in deterring violations of the securities laws by
making awards to whistleblowers who provide information that leads to
the successful enforcement of such laws. In considering this factor,
the Commission may take into account, among other things:
    (i) The degree to which an award enhances the Commission's ability
to enforce the Federal securities laws and protect investors; and
    (ii) The degree to which an award encourages the submission of high
quality information from whistleblowers by appropriately rewarding
whistleblowers' submission of significant information and assistance,
even in cases where the monetary sanctions available for collection are
limited or potential monetary sanctions were reduced or eliminated by
the Commission because an entity self-reported a securities violation
following the whistleblower's related internal disclosure, report, or
submission.
    (iii) Whether the subject matter of the action is a Commission
priority, whether the reported misconduct involves regulated entities
or fiduciaries, whether the whistleblower exposed an industry-wide
practice, the type and severity of the securities violations, the age
and duration of misconduct, the number of violations, and the isolated,
repetitive, or ongoing nature of the violations; and
    (iv) The dangers to investors or others presented by the underlying
violations involved in the enforcement action, including the amount of
harm or potential harm caused by the underlying violations, the type of
harm resulting from or threatened by the underlying violations, and the
number of individuals or entities harmed.
    (4) Participation in internal compliance systems. The Commission
will assess whether, and the extent to which, the whistleblower and any
legal representative of the whistleblower participated in internal
compliance systems. In considering this factor, the Commission may take
into account, among other things:
    (i) Whether, and the extent to which, a whistleblower reported the
possible securities violations through internal whistleblower, legal or
compliance procedures before, or at the same time as, reporting them to
the Commission; and
    (ii) Whether, and the extent to which, a whistleblower assisted any
internal investigation or inquiry concerning the reported securities
violations.
    (b) Factors that may decrease the amount of a whistleblower's
award. In determining whether to decrease the amount of an award, the
Commission

will consider the following factors, which are not listed in order of
importance.
    (1) Culpability. The Commission will assess the culpability or
involvement of the whistleblower in matters associated with the
Commission's action or related actions. In considering this factor, the
Commission may take into account, among other things:
    (i) The whistleblower's role in the securities violations;
    (ii) The whistleblower's education, training, experience, and
position of responsibility at the time the violations occurred;
    (iii) Whether the whistleblower acted with scienter, both generally
and in relation to others who participated in the violations;
    (iv) Whether the whistleblower financially benefitted from the
violations;
    (v) Whether the whistleblower is a recidivist;
    (vi) The egregiousness of the underlying fraud committed by the
whistleblower; and
    (vii) Whether the whistleblower knowingly interfered with the
Commission's investigation of the violations or related enforcement
actions.
    (2) Unreasonable reporting delay. The Commission will assess
whether the whistleblower unreasonably delayed reporting the securities
violations. In considering this factor, the Commission may take into
account, among other things:
    (i) Whether the whistleblower was aware of the relevant facts but
failed to take reasonable steps to report or prevent the violations
from occurring or continuing;
    (ii) Whether the whistleblower was aware of the relevant facts but
only reported them after learning about a related inquiry,
investigation, or enforcement action; and
    (iii) Whether there was a legitimate reason for the whistleblower
to delay reporting the violations.
    (3) Interference with internal compliance and reporting systems.
The Commission will assess, in cases where the whistleblower interacted
with his or her entity's internal compliance or reporting system,
whether the whistleblower undermined the integrity of such system. In
considering this factor, the Commission will take into account whether
there is evidence provided to the Commission that the whistleblower
knowingly:
    (i) Interfered with an entity's established legal, compliance, or
audit procedures to prevent or delay detection of the reported
securities violation;
    (ii) Made any material false, fictitious, or fraudulent statements
or representations that hindered an entity's efforts to detect,
investigate, or remediate the reported securities violations; and
    (iii) Provided any false writing or document knowing the writing or
document contained any false, fictitious or fraudulent statements or
entries that hindered an entity's efforts to detect, investigate, or
remediate the reported securities violations.

Sec.  240.21F-7  Confidentiality of submissions.

    (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
Sec.  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 Sec.  240.21F-10 of this
chapter.

Sec.  240.21F-8  Eligibility.

    (a) To be eligible for a whistleblower award, you must give the
Commission information in the form and manner that the Commission
requires. The procedures for submitting information and making a claim
for an award are described in Sec.  240.21F-9 through Sec.  240.21F-11
of this chapter. You should read these procedures carefully because you
need to follow them in order to be eligible for an award, except that
the Commission may, in its sole discretion, waive any of these
procedures based upon a showing of extraordinary circumstances.
    (b) In addition to any forms required by these rules, the
Commission may also require that you provide certain additional
information. You may be required to:
    (1) Provide explanations and other assistance in order that the
staff may evaluate and use the information that you submitted;
    (2) Provide all additional information in your possession that is
related to the subject matter of your submission in a complete and
truthful manner, through follow-up meetings, or in other forms that our
staff may agree to;
    (3) Provide testimony or other evidence acceptable to the staff
relating to whether you are eligible, or otherwise satisfy any of the
conditions, for an award; and
    (4) Enter into a confidentiality agreement in a form acceptable to
the Office of the Whistleblower, covering any non-public information
that the Commission provides to you, and including a provision that a
violation of the agreement may lead to your ineligibility to receive an
award.
    (c) You are not eligible to be considered for an award if you do
not satisfy the requirements of paragraphs (a) and (b) of this section.
In addition, you are not eligible if:
    (1) You are, or were at the time you acquired the original
information provided to the Commission, a member, officer, or employee
of the Commission, the Department of Justice, an appropriate regulatory
agency, a self-regulatory organization, the Public

Company Accounting Oversight Board, or any law enforcement
organization;
    (2) You are, or were at the time you acquired the original
information provided to the Commission, a member, officer, or employee
of a foreign government, any political subdivision, department, agency,
or instrumentality of a foreign government, or any other foreign
financial regulatory authority as that term is defined in Section
3(a)(52) of the Exchange Act (15 U.S.C. 78c(a)(52));
    (3) You are convicted of a criminal violation that is related to
the Commission action or to a related action (as defined in Sec.
240.21F-4 of this chapter) for which you otherwise could receive an
award;
    (4) You obtained the original information that you gave the
Commission through an audit of a company's financial statements, and
making a whistleblower submission would be contrary to requirements of
Section 10A of the Exchange Act (15 U.S.C. 78j-a).
    (5) You are the spouse, parent, child, or sibling of a member or
employee of the Commission, or you reside in the same household as a
member or employee of the Commission;
    (6) You acquired the original information you gave the Commission
from a person:
    (i) Who is subject to paragraph (c)(4) of this section, unless the
information is not excluded from that person's use, or you are
providing the Commission with information about possible violations
involving that person; or
    (ii) With the intent to evade any provision of these rules; or
    (7) In your whistleblower submission, your other dealings with the
Commission, or your dealings with another authority in connection with
a related action, you knowingly and willfully make any false,
fictitious, or fraudulent statement or representation, or use any false
writing or document knowing that it contains any false, fictitious, or
fraudulent statement or entry with intent to mislead or otherwise
hinder the Commission or another authority.

Sec.  240.21F-9  Procedures for submitting original information.

    (a) To be considered a whistleblower under Section 21F of the
Exchange Act (15 U.S.C. 78u-6(h)), you must submit your information
about a possible securities law violation by either of these methods:
    (1) Online, through the Commission's Web site located at http://www.sec.gov; or
    (2) By mailing or faxing a Form TCR (Tip, Complaint or Referral)
(referenced in Sec.  249.1800 of this chapter) to the SEC Office of the
Whistleblower, 100 F Street NE., Washington, DC 20549-5631, Fax (703)
813-9322.
    (b) Further, to be eligible for an award, you must declare under
penalty of perjury at the time you submit your information pursuant to
paragraph (a)(1) or (2) of this section that your information is true
and correct to the best of your knowledge and belief.
    (c) Notwithstanding paragraphs (a) and (b) of this section, if you
are providing your original information to the Commission anonymously,
then your attorney must submit your information on your behalf pursuant
to the procedures specified in paragraph (a) of this section. Prior to
your attorney's submission, you must provide your attorney with a
completed Form TCR (referenced in Sec.  249.1800 of this chapter) that
you have signed under penalty of perjury. When your attorney makes her
submission on your behalf, your attorney will be required to certify
that he or she:
    (1) Has verified your identity;
    (2) Has reviewed your completed and signed Form TCR (referenced in
Sec.  249.1800 of this chapter) for completeness and accuracy and that
the information contained therein is true, correct and complete to the
best of the attorney's knowledge, information and belief;
    (3) Has obtained your non-waivable consent to provide the
Commission with your original completed and signed Form TCR (referenced
in Sec.  249.1800 of this chapter) in the event that the Commission
requests it due to concerns that you may have knowingly and willfully
made false, fictitious, or fraudulent statements or representations, or
used any false writing or document knowing that the writing or document
contains any false fictitious or fraudulent statement or entry; and
    (4) Consents to be legally obligated to provide the signed Form TCR
(referenced in Sec.  249.1800 of this chapter) within seven (7)
calendar days of receiving such request from the Commission.
    (d) If you submitted original information in writing to the
Commission after July 21, 2010 (the date of enactment of the Dodd-Frank
Wall Street Reform and Consumer Protection Act) but before the
effective date of these rules, your submission will be deemed to
satisfy the requirements set forth in paragraphs (a) and (b) of this
section. If you were an anonymous whistleblower, however, you must
provide your attorney with a completed and signed copy of Form TCR
(referenced in Sec.  249.1800 of this chapter) within 60 days of the
effective date of these rules, your attorney must retain the signed
form in his or her records, and you must provide of copy of the signed
form to the Commission staff upon request by Commission staff prior to
any payment of an award to you in connection with your submission.
Notwithstanding the foregoing, you must follow the procedures and
conditions for making a claim for a whistleblower award described in
Sec. Sec.  240.21F-10 and 240.21F-11 of this chapter.

Sec.  240.21F-10  Procedures for making a claim for a whistleblower
award in SEC actions that result in monetary sanctions in excess of
$1,000,000.

    (a) Whenever a Commission action results in monetary sanctions
totaling more than $1,000,000, the Office of the Whistleblower will
cause to be published on the Commission's Web site a ``Notice of
Covered Action.'' Such Notice will be published subsequent to the entry
of a final judgment or order that alone, or collectively with other
judgments or orders previously entered in the Commission action,
exceeds $1,000,000; or, in the absence of such judgment or order
subsequent to the deposit of monetary sanctions exceeding $1,000,000
into a disgorgement or other fund pursuant to Section 308(b) of the
Sarbanes-Oxley Act of 2002. A claimant will have ninety (90) days from
the date of the Notice of Covered Action to file a claim for an award
based on that action, or the claim will be barred.
    (b) To file a claim for a whistleblower award, you must file Form
WB-APP, Application for Award for Original Information Provided
Pursuant to Section 21F of the Securities Exchange Act of 1934
(referenced in Sec.  249.1801 of this chapter). You must sign this form
as the claimant and submit it to the Office of the Whistleblower by
mail or fax. All claim forms, including any attachments, must be
received by the Office of the Whistleblower within ninety (90) calendar
days of the date of the Notice of Covered Action in order to be
considered for an award.
    (c) If you provided your original information to the Commission
anonymously, you must disclose your identity on the Form WB-APP
(referenced in Sec.  249.1801 of this chapter), and your identity must
be verified in a form and manner that is acceptable to the Office of
the Whistleblower prior to the payment of any award.

    (d) Once the time for filing any appeals of the Commission's
judicial or administrative action has expired, or where an appeal has
been filed, after all appeals in the action have been concluded, the
staff designated by the Director of the Division of Enforcement
(``Claims Review Staff'') will evaluate all timely whistleblower award
claims submitted on Form WB-APP (referenced in Sec.  249.1801 of this
chapter) in accordance with the criteria set forth in these rules. In
connection with this process, the Office of the Whistleblower may
require that you provide additional information relating to your
eligibility for an award or satisfaction of any of the conditions for
an award, as set forth in Sec.  240.21F-(8)(b) of this chapter.
Following that evaluation, the Office of the Whistleblower will send
you a Preliminary Determination setting forth a preliminary assessment
as to whether the claim should be allowed or denied and, if allowed,
setting forth the proposed award percentage amount.
    (e) You may contest the Preliminary Determination made by the
Claims Review Staff by submitting a written response to the Office of
the Whistleblower setting forth the grounds for your objection to
either the denial of an award or the proposed amount of an award. The
response must be in the form and manner that the Office of the
Whistleblower shall require. You may also include documentation or
other evidentiary support for the grounds advanced in your response.
    (1) Before determining whether to contest a Preliminary
Determination, you may:
    (i) Within thirty (30) days of the date of the Preliminary
Determination, request that the Office of the Whistleblower make
available for your review the materials from among those set forth in
Sec.  240.21F-12(a) of this chapter that formed the basis of the Claims
Review Staff's Preliminary Determination.
    (ii) Within thirty (30) calendar days of the date of the
Preliminary Determination, request a meeting with the Office of the
Whistleblower; however, such meetings are not required and the office
may in its sole discretion decline the request.
    (2) If you decide to contest the Preliminary Determination, you
must submit your written response and supporting materials within sixty
(60) calendar days of the date of the Preliminary Determination, or if
a request to review materials is made pursuant to paragraph (e)(1) of
this section, then within sixty (60) calendar days of the Office of the
Whistleblower making those materials available for your review.
    (f) If you fail to submit a timely response pursuant to paragraph
(e) of this section, then the Preliminary Determination will become the
Final Order of the Commission (except where the Preliminary
Determination recommended an award, in which case the Preliminary
Determination will be deemed a Proposed Final Determination for
purposes of paragraph (h) of this section). Your failure to submit a
timely response contesting a Preliminary Determination will constitute
a failure to exhaust administrative remedies, and you will be
prohibited from pursuing an appeal pursuant to Sec.  240.21F-13 of this
chapter.
    (g) If you submit a timely response pursuant to paragraph (e) of
this section, then the Claims Review Staff will consider the issues and
grounds advanced in your response, along with any supporting
documentation you provided, and will make its Proposed Final
Determination.
    (h) The Office of the Whistleblower will then notify the Commission
of each Proposed Final Determination. Within thirty 30 days thereafter,
any Commissioner may request that the Proposed Final Determination be
reviewed by the Commission. If no Commissioner requests such a review
within the 30-day period, then the Proposed Final Determination will
become the Final Order of the Commission. In the event a Commissioner
requests a review, the Commission will review the record that the staff
relied upon in making its determinations, including your previous
submissions to the Office of the Whistleblower, and issue its Final
Order.
    (i) The Office of the Whistleblower will provide you with the Final
Order of the Commission.

Sec.  240.21F-11  Procedures for determining awards based upon a
related action.

    (a) If you are eligible to receive an award following a Commission
action that results in monetary sanctions totaling more than
$1,000,000, you also may be eligible to receive an award based on the
monetary sanctions that are collected from a related action (as defined
in Sec.  240.21F-3 of this chapter).
    (b) You must also use Form WB-APP (referenced in Sec.  249.1801 of
this chapter) to submit a claim for an award in a related action. You
must sign this form as the claimant and submit it to the Office of the
Whistleblower by mail or fax as follows:
    (1) If a final order imposing monetary sanctions has been entered
in a related action at the time you submit your claim for an award in
connection with a Commission action, you must submit your claim for an
award in that related action on the same Form WB-APP (referenced in
Sec.  249.1801 of this chapter) that you use for the Commission action.
    (2) If a final order imposing monetary sanctions in a related
action has not been entered at the time you submit your claim for an
award in connection with a Commission action, you must submit your
claim on Form WB-APP (referenced in Sec.  249.1801 of this chapter)
within ninety (90) days of the issuance of a final order imposing
sanctions in the related action.
    (c) The Office of the Whistleblower may request additional
information from you in connection with your claim for an award in a
related action to demonstrate that you directly (or through the
Commission) voluntarily provided the governmental agency, regulatory
authority or self-regulatory organization the same original information
that led to the Commission's successful covered action, and that this
information led to the successful enforcement of the related action.
The Office of the Whistleblower may, in its discretion, seek assistance
and confirmation from the other agency in making this determination.
    (d) Once the time for filing any appeals of the final judgment or
order in a related action has expired, or if an appeal has been filed,
after all appeals in the action have been concluded, the Claims Review
Staff will evaluate all timely whistleblower award claims submitted on
Form WB-APP (referenced in Sec.  249.1801 of this chapter) in
connection with the related action. The evaluation will be undertaken
pursuant to the criteria set forth in these rules. In connection with
this process, the Office of the Whistleblower may require that you
provide additional information relating to your eligibility for an
award or satisfaction of any of the conditions for an award, as set
forth in Sec.  240.21F-(8)(b) of this chapter. Following this
evaluation, the Office of the Whistleblower will send you a Preliminary
Determination setting forth a preliminary assessment as to whether the
claim should be allowed or denied and, if allowed, setting forth the
proposed award percentage amount.
    (e) You may contest the Preliminary Determination made by the
Claims Review Staff by submitting a written response to the Office of
the Whistleblower setting forth the grounds for your objection to
either the denial of

an award or the proposed amount of an award. The response must be in
the form and manner that the Office of the Whistleblower shall require.
You may also include documentation or other evidentiary support for the
grounds advanced in your response.
    (1) Before determining whether to contest a Preliminary
Determination, you may:
    (i) Within thirty (30) days of the date of the Preliminary
Determination, request that the Office of the Whistleblower make
available for your review the materials from among those set forth in
Sec.  240.21F-12(a) of this chapter that formed the basis of the Claims
Review Staff's Preliminary Determination.
    (ii) Within thirty (30) days of the date of the Preliminary
Determination, request a meeting with the Office of the Whistleblower;
however, such meetings are not required and the office may in its sole
discretion decline the request.
    (2) If you decide to contest the Preliminary Determination, you
must submit your written response and supporting materials within sixty
(60) calendar days of the date of the Preliminary Determination, or if
a request to review materials is made pursuant to paragraph (e)(1)(i)
of this section, then within sixty (60) calendar days of the Office of
the Whistleblower making those materials available for your review.
    (f) If you fail to submit a timely response pursuant to paragraph
(e) of this section, then the Preliminary Determination will become the
Final Order of the Commission (except where the Preliminary
Determination recommended an award, in which case the Preliminary
Determination will be deemed a Proposed Final Determination for
purposes of paragraph (h) of this section). Your failure to submit a
timely response contesting a Preliminary Determination will constitute
a failure to exhaust administrative remedies, and you will be
prohibited from pursuing an appeal pursuant to Sec.  240.21F-13 of this
chapter.
    (g) If you submit a timely response pursuant to paragraph (e) of
this section, then the Claims Review Staff will consider the issues and
grounds that you advanced in your response, along with any supporting
documentation you provided, and will make its Proposed Final
Determination.
    (h) The Office of the Whistleblower will notify the Commission of
each Proposed Final Determination. Within thirty 30 days thereafter,
any Commissioner may request that the Proposed Final Determination be
reviewed by the Commission. If no Commissioner requests such a review
within the 30-day period, then the Proposed Final Determination will
become the Final Order of the Commission. In the event a Commissioner
requests a review, the Commission will review the record that the staff
relied upon in making its determinations, including your previous
submissions to the Office of the Whistleblower, and issue its Final
Order.
    (i) The Office of the Whistleblower will provide you with the Final
Order of the Commission.

Sec.  240.21F-12  Materials that may form the basis of an award
determination and that may comprise the record on appeal.

    (a) The following items constitute the materials that the
Commission and the Claims Review Staff may rely upon to make an award
determination pursuant to Sec. Sec.  240.21F-10 and 240.21F-11 of this
chapter:
    (1) Any publicly available materials from the covered action or
related action, including:
    (i) The complaint, notice of hearing, answers and any amendments
thereto;
    (ii) The final judgment, consent order, or final administrative
order;
    (iii) Any transcripts of the proceedings, including any exhibits;
    (iv) Any items that appear on the docket; and
    (v) Any appellate decisions or orders.
    (2) The whistleblower's Form TCR (referenced in Sec.  249.1800 of
this chapter), including attachments, and other related materials
provided by the whistleblower to assist the Commission with the
investigation or examination;
    (3) The whistleblower's Form WB-APP (referenced in Sec.  249.1800
of this chapter), including attachments, and any other filings or
submissions from the whistleblower in support of the award application;
    (4) Sworn declarations (including attachments) from the Commission
staff regarding any matters relevant to the award determination;
    (5) With respect to an award claim involving a related action, any
statements or other information that the entity provides or identifies
in connection with an award determination, provided the entity has
authorized the Commission to share the information with the claimant.
(Neither the Commission nor the Claims Review Staff may rely upon
information that the entity has not authorized the Commission to share
with the claimant); and
    (6) Any other documents or materials including sworn declarations
from third-parties that are received or obtained by the Office of the
Whistleblower to assist the Commission resolve the claimant's award
application, including information related to the claimant's
eligibility. (Neither the Commission nor the Claims Review Staff may
rely upon information that the entity has not authorized the Commission
to share with the claimant).
    (b) These rules do not entitle claimants to obtain from the
Commission any materials (including any pre-decisional or internal
deliberative process materials that are prepared exclusively to assist
the Commission in deciding the claim) other than those listed in
paragraph (a) of this section. Moreover, the Office of the
Whistleblower may make redactions as necessary to comply with any
statutory restrictions, to protect the Commission's law enforcement and
regulatory functions, and to comply with requests for confidential
treatment from other law enforcement and regulatory authorities. The
Office of the Whistleblower may also require you to sign a
confidentiality agreement, as set forth in Sec.  240.21F-(8)(b)(4) of
this chapter, before providing these materials.

Sec.  240.21F-13  Appeals.

    (a) Section 21F of the Exchange Act (15 U.S.C. 78u-6) commits
determinations of whether, to whom, and in what amount to make awards
to the Commission's discretion. A determination of whether or to whom
to make an award may be appealed within 30 days after the Commission
issues its final decision to the United States Court of Appeals for the
District of Columbia Circuit, or to the circuit where the aggrieved
person resides or has his principal place of business. Where the
Commission makes an award based on the factors set forth in Sec.
240.21F-6 of this chapter of not less than 10 percent and not more than
30 percent of the monetary sanctions collected in the Commission or
related action, the Commission's determination regarding the amount of
an award (including the allocation of an award as between multiple
whistleblowers, and any factual findings, legal conclusions, policy
judgments, or discretionary assessments involving the Commission's
consideration of the factors in Sec.  240.21F-6 of this chapter) is not
appealable.
    (b) The record on appeal shall consist of the Preliminary
Determination, the Final Order of the Commission, and any other items
from those set forth in Sec.  240.21F-12(a) of this chapter that either
the claimant or the Commission identifies for inclusion in the record.

The record on appeal shall not include any pre-decisional or internal
deliberative process materials that are prepared exclusively to assist
the Commission in deciding the claim (including the staff's Draft Final
Determination in the event that the Commissioners reviewed the claim
and issued the Final Order).

Sec.  240.21F-14  Procedures applicable to the payment of awards.

    (a) Any award made pursuant to these rules will be paid from the
Securities and Exchange Commission Investor Protection Fund (the
``Fund'').
    (b) A recipient of a whistleblower award is entitled to payment on
the award only to the extent that a monetary sanction is collected in
the Commission action or in a related action upon which the award is
based.
    (c) Payment of a whistleblower award for a monetary sanction
collected in a Commission action or related action shall be made
following the later of:
    (1) The date on which the monetary sanction is collected; or
    (2) The completion of the appeals process for all whistleblower
award claims arising from:
    (i) The Notice of Covered Action, in the case of any payment of an
award for a monetary sanction collected in a Commission action; or
    (ii) The related action, in the case of any payment of an award for
a monetary sanction collected in a related action.
    (d) If there are insufficient amounts available in the Fund to pay
the entire amount of an award payment within a reasonable period of
time from the time for payment specified by paragraph (c) of this
section, then subject to the following terms, the balance of the
payment shall be paid when amounts become available in the Fund, as
follows:
    (1) Where multiple whistleblowers are owed payments from the Fund
based on awards that do not arise from the same Notice of Covered
Action (or related action), priority in making these payments will be
determined based upon the date that the collections for which the
whistleblowers are owed payments occurred. If two or more of these
collections occur on the same date, those whistleblowers owed payments
based on these collections will be paid on a pro rata basis until
sufficient amounts become available in the Fund to pay their entire
payments.
    (2) Where multiple whistleblowers are owed payments from the Fund
based on awards that arise from the same Notice of Covered Action (or
related action), they will share the same payment priority and will be
paid on a pro rata basis until sufficient amounts become available in
the Fund to pay their entire payments.

Sec.  240.21F-15  No amnesty.

    The Securities Whistleblower Incentives and Protection provisions
do not provide amnesty to individuals who provide information to the
Commission. The fact that you may become a whistleblower and assist in
Commission investigations and enforcement actions does not preclude the
Commission from bringing an action against you based upon your own
conduct in connection with violations of the Federal securities laws.
If such an action is determined to be appropriate, however, the
Commission will take your cooperation into consideration in accordance
with its Policy Statement Concerning Cooperation by Individuals in
Investigations and Related Enforcement Actions (17 CFR 202.12).

Sec.  240.21F-16  Awards to whistleblowers who engage in culpable
conduct.

    In determining whether the required $1,000,000 threshold has been
satisfied (this threshold is further explained in Sec.  240.21F-10 of
this chapter) for purposes of making any award, the Commission will not
take into account any monetary sanctions that the whistleblower is
ordered to pay, or that are ordered against any entity whose liability
is based substantially on conduct that the whistleblower directed,
planned, or initiated. Similarly, if the Commission determines that a
whistleblower is eligible for an award, any amounts that the
whistleblower or such an entity pay in sanctions as a result of the
action or related actions will not be included within the calculation
of the amounts collected for purposes of making payments.

Sec.  240.21F-17  Staff communications with individuals reporting
possible securities law violations.

    (a) No person may take any action to impede an individual from
communicating directly with the Commission staff about a possible
securities law violation, including enforcing, or threatening to
enforce, a confidentiality agreement (other than agreements dealing
with information covered by Sec.  240.21F-4(b)(4)(i) and Sec.  240.21F-
4(b)(4)(ii) of this chapter related to the legal representation of a
client) with respect to such communications.
    (b) If you are a director, officer, member, agent, or employee of
an entity that has counsel, and you have initiated communication with
the Commission relating to a possible securities law violation, the
staff is authorized to communicate directly with you regarding the
possible securities law violation without seeking the consent of the
entity's counsel.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
3. The authority citation for Part 249 is amended by adding the
following citations in numerical order to read as follows:

    Authority: 15 U.S.C. 78a, et seq. and 7201 et seq.; and 18
U.S.C. 1350, unless otherwise noted.
* * * * *
    Section 249.1800 is also issued under Public Law 111.203, Sec.
922(a), 124 Stat 1841 (2010).
    Section 249.1801 is also issued under Public Law 111.203, Sec.
922(a), 124 Stat 1841 (2010).
* * * * *

0
4. Add Subpart S to read as follows:

Subpart S--Whistleblower Forms

Sec.
249.1800 Form TCR, tip, complaint or referral.
249.1801 Form WB-APP, Application for award for original information
submitted pursuant to Section 21F of the Securities Exchange Act of
1934.

Sec.  249.1800  Form TCR, tip, complaint or referral.

    This form may be used by anyone wishing to provide the SEC with
information concerning a violation of the Federal securities laws. The
information provided may be disclosed to Federal, state, local, or
foreign agencies responsible for investigating, prosecuting, enforcing,
or implementing the Federal securities laws, rules, or regulations
consistent with the confidentiality requirements set forth in Section
21F(h)(2) of the Exchange Act (15 U.S.C. 78u-6(h)(2)) and Sec.
240.21F-7 of this chapter.

Sec.  249.1801  Form WB-APP, Application for award for original
information submitted pursuant to Section 21F of the Securities
Exchange Act of 1934.

    This form must be used by persons making a claim for a
whistleblower award in connection with information provided to the SEC
or to another agency in a related action. The information provided will
enable the Commission to determine your eligibility for payment of an
award pursuant to Section 21F of the Securities Exchange Act of 1934
(15 U.S.C. 78u-6). This information may be disclosed to Federal, state,
local, or foreign agencies responsible for investigating, prosecuting,
enforcing, or

implementing the Federal securities laws, rules, or regulations
consistent with the confidentiality requirements set forth in Section
21F(h)(2) of the Exchange Act (15 U.S.C. 78u-6(h)(2)) and Sec.
240.21F-7 of this chapter. Furnishing the information is voluntary, but
a decision not to do so may result in you not being eligible for award
consideration.

    Note: The following Forms will not appear in the Code of Federal
Regulations.

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Privacy Act Statement

    This notice is given under the Privacy Act of 1974. This form may
be used by anyone wishing to provide the SEC with information
concerning a possible violation of the federal securities laws. We are
authorized to request information from you by various laws: Sections 19
and 20 of the Securities Act of 1933, Sections 21 and 21F of the
Securities Exchange Act of 1934, Section 321 of the Trust Indenture Act
of 1939, Section 42 of the Investment Company Act of 1940, Section 209
of the Investment Advisers Act of 1940 and Title 17 of the Code of
Federal Regulations, Section 202.5.
    Our principal purpose in requesting information is to gather facts
in order to determine whether any person has violated, is violating, or
is about to violate any provision of the federal securities laws or
rules for which we have enforcement authority. Facts developed may,
however, constitute violations of other laws or rules. Further, if you
are submitting information for the SEC's whistleblower award program
pursuant to Section 21F of the Securities Exchange Act of 1934
(Exchange Act), the information provided will be used in connection
with our evaluation of your or your client's eligibility and other
factors relevant to our determination of whether to pay an award to you
or your client.
    The information provided may be used by SEC personnel for purposes
of investigating possible violations of, or to conduct investigations
authorized by, the federal securities law; in proceedings in which the
federal securities laws are in issue or the SEC is a party; to
coordinate law enforcement activities between the SEC and other
federal, state, local or foreign law enforcement agencies, securities
self regulatory organizations, and foreign securities authorities; and
pursuant to other routine uses as described in SEC-42 ``Enforcement
Files.''
    Furnishing the information requested herein is voluntary. However,
a decision not provide any of the requested information, or failure to
provide complete information, may affect our evaluation of your
submission. Further, if you are submitting this information for the SEC
whistleblower program and you do not execute the Whistleblower
Declaration or, if you are submitting information anonymously, identify
the attorney representing you in this matter, you may not be considered
for an award.
    Questions concerning this form maybe directed to the SEC Office of
the Whistleblower, 100 F Street, NE, Washington, DC 20549, Tel. (202)
551-4790, Fax<PHONE_NUMBER>.

Submission Procedures

     After manually completing this Form TCR, please send it by
mail or delivery to the SEC Office of the Whistleblower, 100 F. Street,
NE, Washington, DC 20549, or by facsimile to<PHONE_NUMBER>.
     You have the right to submit information anonymously. If
you are submitting anonymously and you want to be considered for a
whistleblower award, however, you must be represented by an attorney in
this matter and Section B of this form must be completed. Otherwise,
you may, but are not required, to have an attorney. If you are not
represented by an attorney in this matter, you may leave Section B
blank.
     If you are submitting information for the SEC's
whistleblower award program, you must submit your information either
using this Form TCR or electronically through the SEC's Electronic Data
Collection System, available on the SEC web site at www.sec.gov.

Instructions for Completing Form TCR:

Section A: Information about You

    Questions 1-3: Please provide the following information about
yourself:
     Last name, first name, and middle initial
     Complete address, including city, state and zip code
     Telephone number and, if available, an alternate number
where you can be reached
     Your e-mail address (to facilitate communications, we
strongly encourage you to provide your email address),
     Your preferred method of communication; and
     Your occupation

Section B: Information about Your Attorney. Complete this section only
if you are represented by an attorney in this matter. You must be
represented by an attorney, and this section must be completed, if you
are submitting your information anonymously and you want to be
considered for the SEC's whistleblower award program.

    Questions 1-4: Provide the following information about the attorney
representing you in this matter:
     Attorney's name
     Firm name
     Complete address, including city, state and zip code
     Telephone number and fax number, and
     E-mail address

Section C: Tell Us about the Individual and/or Entity You Have a
Complaint Against. If your complaint relates to more than two
individuals and/or entities, you may attach additional sheets.

    Question 1: Choose one of the following that best describes the
individual or entity to which your complaint relates:
     For Individuals: accountant, analyst, attorney, auditor,
broker, compliance officer, employee, executive officer or director,
financial planner, fund manager, investment advisor representative,
stock promoter, trustee, unknown, or other (specify).
     For Entity: bank, broker-dealer, clearing agency, day
trading firm, exchange, Financial Industry Regulatory Authority,
insurance company, investment advisor, investment advisor
representative, investment company, Individual Retirement Account or
401(k) custodian/administrator, market maker, municipal securities
dealers, mutual fund, newsletter company/investment publication
company, on-line trading firm, private fund company (including hedge
fund, private equity fund, venture capital fund, or real estate fund),
private/closely held company, publicly held company, transfer agent/
paying agent/registrar, underwriter, unknown, or other (specify).
    Questions 2-4: For each subject, provide the following information,
if known:
     Full name
     Complete address, including city, state and zip code
     Telephone number,
     E-mail address, and
     Internet address, if applicable

Section D: Tell Us about Your Complaint

    Question 1: State the date (mm/dd/yyyy) that the alleged conduct
began.
    Question 2: Choose the option that you believe best describes the
nature of your complaint. If you are alleging more than one violation,
please list all that you believe may apply. Use additional sheets if
necessary.
     Theft/misappropriation (advance fee fraud; lost or stolen
securities; hacking of account)
     Misrepresentation/omission (false/misleading marketing/
sales literature; inaccurate, misleading or non-disclosure by Broker-
Dealer, Investment Adviser and Associated Person; false/material
misstatements in firm research that were basis of transaction)
     Offering fraud (Ponzi/pyramid scheme; other offering
fraud)
     Registration violations (unregistered securities offering)
     Trading (after hours trading; algorithmic trading; front-
running; insider trading, manipulation of securities/prices; market
timing; inaccurate quotes/pricing information; program trading; short
selling; trading suspensions; volatility)
     Fees/mark-ups/commissions (excessive or unnecessary
administrative fees; excessive commissions or sales fees; failure to
disclose fees; insufficient notice of change in fees; negotiated fee
problems; excessive mark-ups/markdowns; excessive or otherwise improper
spreads)
     Corporate disclosure/reporting/other issuer matter (audit;
corporate governance; conflicts of interest by management; executive
compensation; failure to notify shareholders of corporate events;
false/misleading financial statements, offering documents, press
releases, proxy materials; failure to file reports; financial fraud;
Foreign Corrupt Practices Act violations; going private transactions;
mergers and acquisitions; restrictive legends, including 144 issues;
reverse stock splits; selective disclosure--Regulation FD, 17 CFR 243;
shareholder proposals; stock options for employees; stock splits;
tender offers)
     Sales and advisory practices (background information on
past violations/integrity; breach of fiduciary duty/responsibility
(IA); failure to disclose breakpoints; churning/excessive trading; cold
calling; conflict of interest; abuse of authority in discretionary
trading; failure to respond to investor; guarantee against loss/promise
to buy back shares; high pressure sales techniques; instructions by
client not followed; investment objectives not followed; margin; poor
investment advice; Regulation E (Electronic Transfer Act); Regulation
S-P, 17 CFR 248, (privacy issues); solicitation methods (non-cold
calling; seminars); suitability; unauthorized transactions)
     Operational (bond call; bond default; difficulty buying/
selling securities; confirmations/statements; proxy materials/
prospectus; delivery of funds/proceeds; dividend and interest problems;
exchanges/switches of mutual funds with fund family; margin (illegal
extension of margin credit, Regulation T restrictions, unauthorized
margin transactions); online issues (trading system operation);
settlement (including T+1 or T=3 concerns); stock certificates; spam;
tax reporting problems; titling securities (difficulty titling
ownership); trade execution.
     Customer accounts (abandoned or inactive accounts; account
administration and processing; identity theft affecting account; IPOs:
problems with IPO allocation or eligibility; inaccurate valuation of
Net Asset Value; transfer of account)
     Comments/complaints about SEC, Self-Regulatory
Organization, and Securities Investor Protection Corporation processes
& programs (arbitration: bias by arbitrators/forum, failure to pay/
comply with award, mandatory arbitration requirements, procedural
problems or delays; SEC: complaints about enforcement actions,
complaints about rulemaking, failure to act; Self-Regulatory
Organization: failure to act; Investor Protection: inadequacy of laws
or rules; SIPC: customer protection, proceedings and Broker-Dealer
liquidations;
     Other (analyst complaints; market maker activities;
employer/employee disputes; specify other).
    Question 3a: State whether you or your counsel have had any prior
communications with the SEC concerning this matter.
    Question 3b: If the answer to question 3a is yes, provide the name
of the SEC staff member with whom you or your counsel communicated.
    Question 4a: Indicate whether you or your counsel have provided the
information you are providing to the SEC to any other agency or
organization.
    Question 4b: If the answer to question 4a is yes, provide details.
    Question 4c: Provide the name and contact information of the point
of contact at the other agency or organization, if known.
    Question 5a: Indicate whether your complaint relates to an entity
of which you are, or were in the past, an officer, director, counsel,
employee, consultant, or contractor.
    Question 5b: If the answer to question 5a is yes, state whether you
have reported this violation to your

supervisor, compliance office, whistleblower hotline, ombudsman, or any
other available mechanism at the entity for reporting violations.
    Question 5c: If the answer to question 5b is yes, provide details.
    Question 5d: Provide the date on which you took the actions
described in questions 5a and 5b.
    Question 6a: Indicate whether you have taken any other action
regarding your complaint, including whether you complained to the SEC,
another regulator, a law enforcement agency, or any other agency or
organization; initiated legal action, mediation or arbitration, or
initiated any other action.
    Question 6b: If you answered yes to question 6a, provide details,
including the date on which you took the action(s) described, the name
of the person or entity to whom you directed any report or complaint
and contact information for the person or entity, if known, and the
complete case name, case number, and forum of any legal action you have
taken. Use additional sheets if necessary.
    Question 7a: Choose from the following the option that you believe
best describes the type of security or investment at issue, if
applicable:
     1031 exchanges
     529 plans
     American Depositary Receipts
     Annuities (equity-indexed annuities, fixed annuities,
variable annuities)
     Asset-backed securities
     Auction rate securities
     Banking products (including credit cards)
     Certificates of deposit (CDs)
     Closed-end funds
     Coins and precious metals (gold, silver, etc.)
     Collateralized mortgage obligations (CMOs)
     Commercial paper
     Commodities (currency transactions, futures, stock index
options)
     Convertible securities
     Debt (corporate, lower-rated or ``junk'', municipal)
     Equities (exchange-traded, foreign, Over-the-Counter,
unregistered, linked notes)
     Exchange Traded Funds
     Franchises or business ventures
     Hedge funds
     Insurance contracts (not annuities)
     Money-market funds
     Mortgage-backed securities (mortgages, reverse mortgages)
     Mutual funds
     Options (commodity options, index options)
     Partnerships
     Preferred shares
     Prime bank securities/high yield programs
     Promissory notes
     Real estate (real estate investment trusts (REITs))
     Retirement plans (401(k), IRAs)
     Rights and warrants
     Structured note products
     Subprime issues
     Treasury securities
     U.S. government agency securities
     Unit investment trusts (UIT)
     Viaticals and life settlements
     Wrap accounts
     Separately Managed Accounts (SMAs)
     Unknown
     Other (specify)
    Question 7b: Provide the name of the issuer or security, if
applicable.
    Question 7c: Provide the ticker symbol or CUSIP number of the
security, if applicable.
    Question 8: State in detail all the facts pertinent to the alleged
violation. Explain why you believe the facts described constitute a
violation of the federal securities laws. Attach additional sheets if
necessary.
    Question 9: Describe all supporting materials in your possession
and the availability and location of additional supporting materials
not in your possession. Attach additional sheets if necessary.
    Question 10: Describe how you obtained the information that
supports your allegation. If any information was obtained from an
attorney or in a communication where an attorney was present, identify
such information with as much particularity as possible. In addition,
if any information was obtained from a public source, identify the
source with as much particularity as possible. Attach additional sheets
if necessary.
    Question 11: You may use this space to identify any documents or
other information in your submission that you believe could reasonably
be expected to reveal your identity. Explain the basis for your belief
that your identity would be revealed if the documents or information
were disclosed to a third party.
    Question 12: Provide any additional information you think may be
relevant.

Section E: Eligibility Requirements

    Question 1: State whether you are currently, or were at the time
you acquired the original information that you are submitting to the
SEC, a member, officer, or employee of the Department of Justice; the
Securities and Exchange Commission; the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision; the
Public Company Accounting Oversight Board; any law enforcement
organization; or any national securities exchange, registered
securities association, registered clearing agency, the Municipal
Securities Rulemaking Board
    Question 2: State whether you are, or were you at the time you
acquired the original information you are submitting to the SEC, a
member, officer or employee of a foreign government, any political
subdivision, department, agency, or instrumentality of a foreign
government, or any other foreign financial regulatory authority as that
term is defined in Section 3(a)(52) of the Securities Exchange Act of
1934.
     Section 3(a)(52) of the Exchange Act (15 U.S.C. Sec.
78c(a)(52)) currently defines ``foreign financial regulatory
authority'' as ``any (A) foreign securities authority, (B) other
governmental body or foreign equivalent of a self-regulatory
organization empowered by a foreign government to administer or enforce
its laws relating to the regulation of fiduciaries, trusts, commercial
lending, insurance, trading in contracts of sale of a commodity for
future delivery, or other instruments traded on or subject to the rules
of a contract market, board of trade, or foreign equivalent, or other
financial activities, or (C) membership organization a function of
which is to regulate participation of its members in activities listed
above.''
    Question 3: State whether you acquired the information you are
providing to the SEC through the performance of an engagement required
under the securities laws by an independent public accountant.
    Question 4: State whether you are providing the information
pursuant to a cooperation agreement with the SEC or with any other
agency or organization.
    Question 5: State whether you are a spouse, parent, child or
sibling of a member or employee of the SEC, or whether you reside in
the same household as a member or employee of the SEC.
    Question 6: State whether you acquired the information you are
providing to the SEC from any individual described in Question 1
through 5 of this Section.
    Question 7: If you answered ``yes'' to questions 1 though 6, please
provide details.
    Question 8a: State whether you are providing the information you
are submitting to the SEC before you (or anyone representing you)
received any request, inquiry or demand that relates

to the subject matter of your submission in connection with: (i) an
investigation, inspection or examination by the SEC, the Public Company
Accounting Oversight Board, or any self-regulatory organization; or
(ii) an investigation by Congress, or any other authority of the
federal government, or a state Attorney General or securities
regulatory authority?
    Question 8b: If you answered ``no'' to questions 8a, please provide
details. Use additional sheets if necessary.
    Question 9a: State whether you are the subject or target of a
criminal investigation or have been convicted of a criminal violation
in connection with the information you are submitting to the SEC.
    Question 9b: If you answered ``yes'' to question 9a, please provide
details, including the name of the agency or organization that
conducted the investigation or initiated the action against you, the
name and telephone number of your point of contact at the agency or
organization, if available and the investigation/case name and number,
if applicable. Use additional sheets, if necessary.

SECTION F: Whistleblower's Declaration.

    You must sign this Declaration if you are submitting this
information pursuant to the SEC whistleblower program and wish to be
considered for an award. If you are submitting your information
anonymously, you must still sign this Declaration, and you must provide
your attorney with the original of this signed form.
    If you are not submitting your information pursuant to the SEC
whistleblower program, you do not need to sign this Declaration.

SECTION G: COUNSEL CERTIFICATION

    If you are submitting this information pursuant to the SEC
whistleblower program and are doing so anonymously, your attorney must
sign the Counsel Certification section.
    If you are represented in this matter but you are not submitting
your information pursuant to the SEC whistleblower program, your
attorney does not need to sign the Counsel Certification Section.
BILLING CODE 8011-01-P

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[GRAPHIC] [TIFF OMITTED] TR13JN11.009

BILLING CODE 8011-01-C

Privacy Act Statement

    This notice is given under the Privacy Act of 1974. We are
authorized to request information from you by Section 21F of the
Securities Exchange Act of 1934. Our principal purpose in requesting
this information is to assist in our evaluation of your eligibility and
other factors relevant to our determination of whether to pay a
whistleblower award to you under Section 21F of the Exchange Act.
    However, the information provided may be used by SEC personnel for
purposes of investigating possible violations of, or to conduct
investigations authorized by, the federal securities law; in
proceedings in which the federal securities laws are in issue or the
SEC is a party; to coordinate law enforcement activities between the
SEC and other federal, state, local or foreign law enforcement
agencies, securities self regulatory organizations, and foreign
securities authorities; and pursuant to other routine uses as described
in SEC-42 ``Enforcement Files.''

    Furnishing this information is voluntary, but a decision not do so,
or failure to provide complete information, may result in our denying a
whistleblower award to you, or may affect our evaluation of the
appropriate amount of an award. Further, if you are submitting this
information for the SEC whistleblower program and you do not execute
the Declaration, you may not be considered for an award.
    Questions concerning this form may be directed to the SEC Office of
the Whistleblower, 100 F Street, NE, Washington, DC 20549-5631, Tel.
(202) 551-4790, Fax<PHONE_NUMBER>.

General

     This form should be used by persons making a claim for a
whistleblower award in connection with information provided to the SEC
or to another agency in a related action. In order to be deemed
eligible for an award, you must meet all the requirements set forth in
Section 21F of the Securities Exchange Act of 1934 and the rules
thereunder.
     You must sign the Form WB-APP as the claimant. If you
provided your information to the SEC anonymously, you must now disclose
your identity on this form and your identity must be verified in a form
and manner that is acceptable to the Office of the Whistleblower prior
to the payment of any award.
    [cir] If you are filing your claim in connection with information
that you provided to the SEC, then your Form WB-APP, and any
attachments thereto, must be received by the SEC Office of the
Whistleblower within sixty (60) days of the date of the Notice of
Covered Action to which the claim relates.
    [cir] If you are filing your claim in connection with information
you provided to another agency in a related action, then your Form WB-
APP, and any attachments thereto, must be received by the SEC Office of
the Whistleblower as follows:
     If a final order imposing monetary sanctions has been
entered in a related action at the time you submit your claim for an
award in connection with a Commission action, you must submit your
claim for an award in that related action on the same Form WB-APP that
you use for the Commission action.
     If a final order imposing monetary sanctions in a related
action has not been entered at the time you submit your claim for an
award in connection with a Commission action, you must submit your
claim on Form WB-APP within sixty (60) days of the issuance of a final
order imposing sanctions in the related action.
     You must submit your Form WB-APP to us in one of the
following two ways:
    [cir] By mailing or delivering the signed form to the SEC Office of
the Whistleblower, 100 F Street NE, Washington, DC 20549-5631; or
    [cir] By faxing the signed form to<PHONE_NUMBER>.

Instructions for Completing Form WB-APP

Section A: Applicant's Information

    Questions 1-3: Provide the following information about yourself:
     First and last name, and middle initial
     Complete address, including city, state and zip code
     Telephone number and, if available, an alternate number
where you can be reached
     E-mail address

Section B: Attorney's Information. If you are represented by an
attorney in this matter, provide the information requested. If you are
not representing an attorney in this matter, leave this Section blank.

    Questions 1-4: Provide the following information about the attorney
representing you in this matter:
     Attorney's name
     Firm name
     Complete address, including city, state and zip code
     Telephone number and fax number, and
     E-mail address.

Section C: Tip/Complaint Details

    Question 1: Indicate the manner in which your original information
was submitted to the SEC.
    Question 2a: Include the TCR (Tip, Complaint or Referral) number to
which this claim relates.
    Question 2b: Provide the date on which you submitted your
information to the SEC.
    Question 2c: Provide the name of the individual(s) or entity(s) to
which your complaint related.

Section D: Notice of Covered Action

    The process for making a claim for a whistleblower award begins
with the publication of a ``Notice of a Covered Action'' on the
Commission's Web site. This notice is published whenever a judicial or
administrative action brought by the Commission results in the
imposition of monetary sanctions exceeding $1,000,000. The Notice is
published on the Commission's Web site subsequent to the entry of a
final judgment or order in the action that by itself, or collectively
with other judgments or orders previously entered in the action,
exceeds the $1,000,000 threshold.
    Question 1: Provide the date of the Notice of Covered Action to
which this claim relates.
    Question 2: Provide the notice number of the Notice of Covered
Action.
    Question 3a: Provide the case name referenced in Notice of Covered
Action.
    Question 3b: Provide the case number referenced in Notice of
Covered Action.

Section E: Claims Pertaining to Related Actions

    Question 1: Provide the name of the agency or organization to which
you provided your information.
    Question 2: Provide the name and contact information for your point
of contact at the agency or organization, if known.
    Question 3a: Provide the date on which that you provided your
information to the agency or organization referenced in question E1.
    Question 3b: Provide the date on which the agency or organization
referenced in question E1 filed the related action that was based upon
the information you provided.
    Question 4a: Provide the case name of the related action.
    Question 4b: Provide the case number of the related action.

Section F: Eligibility Requirements

    Question 1: State whether you are currently, or were at the time
you acquired the original information that you submitted to the SEC a
member, officer, or employee of the Department of Justice; the
Securities and Exchange Commission; the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision; the
Public Company Accounting Oversight Board; any law enforcement
organization; or any national securities exchange, registered
securities association, registered clearing agency, the Municipal
Securities Rulemaking Board
    Question 2: State whether you are, or were you at the time you
acquired the original information you submitted to the SEC, a member,
officer or employee of a foreign government, any political subdivision,
department, agency, or instrumentality of a foreign government, or any
other foreign financial regulatory authority as that term is defined in
Section 3(a)(52) of the Securities Exchange Act of 1934.
     Section 3(a)(52) of the Exchange Act (15 U.S.C. Sec.
78c(a)(52)) currently defines

``foreign financial regulatory authority'' as ``any (A) foreign
securities authority, (B) other governmental body or foreign equivalent
of a self-regulatory organization empowered by a foreign government to
administer or enforce its laws relating to the regulation of
fiduciaries, trusts, commercial lending, insurance, trading in
contracts of sale of a commodity for future delivery, or other
instruments traded on or subject to the rules of a contract market,
board of trade, or foreign equivalent, or other financial activities,
or (C) membership organization a function of which is to regulate
participation of its members in activities listed above.''
    Question 3: Indicate whether you acquired the information you
provided to the SEC through the performance of an engagement required
under the securities laws by an independent public accountant.
    Question 4: State whether you provided the information submitted to
the SEC pursuant to a cooperation agreement with the SEC or with any
other agency or organization.
    Question 5: State whether you are a spouse, parent, child or
sibling of a member or employee of the Commission, or whether you
reside in the same household as a member or employee of the Commission.
    Question 6: State whether you acquired the information you are
providing to the SEC from any individual described in Question 1
through 5 of this Section.
    Question 7: If you answered ``yes'' to questions 1 though 6, please
provide details.
    Question 8a: State whether you provided the information identified
submitted to the SEC before you (or anyone representing you) received
any request, inquiry or demand from the SEC, Congress, or any other
federal, state or local authority, or any self regulatory organization,
or the Public Company Accounting Oversight Board about a matter to
which the information your submission was relevant.
    Question 8b: If you answered ``no'' to questions 8a, please provide
details. Use additional sheets if necessary.
    Question 9a: State whether you are the subject or target of a
criminal investigation or have been convicted of a criminal violation
in connection with the information upon which your application for