The SEC has created a “Claims Review Staff” (“CRS”) independent of the Office of the Whistleblower, to review all APP applications. The CRS will often obtain affidavits from the SEC investigators responsible for the underlying enforcement action. These investigators know who the “real” whistleblowers were, and what information they relied upon to take the enforcement action. Their statements, which are not public, usually form the basis for the CRS to issue an initial decision.
Once the whistleblower obtains a copy of the initial ruling from the CRS, he or she can accept that ruling. If there is no appeal of the initial ruling of the CRS, and if the SEC Commission approves that initial ruling, the whistleblower cannot challenge the SEC’s decision in court.
A whistleblower can seek to review the documentation relied upon by the CRS. This material is only provided to the whistleblower if he or she signs a nondisclosure agreement, as the SEC maintains that this documentation is part of their confidential decision-making process.
The whistleblower can file an internal appeal of the decision of the CRS. The whistleblower can also request a meeting with employees of the Whistleblower Office or the CRS to discuss the claim. After an appeal of the initial decision of the CRS, the Commission staff will finalize its recommendation to the full SEC Commission.
The full SEC Commission reviews the CRS’s final recommendation. If no Commissioner requests a vote on the recommendation, the recommendation becomes final. The Commission can also take jurisdiction over the matter and issue a final decision based on the record.