Whistleblower reward provisions have transformed the landscape by introducing related action rewards. If a whistleblower’s initial information leads to a successful SEC enforcement action, they may also be eligible for rewards based on actions taken by other involved agencies. Although a case might appear to solely concern securities, it is possible that other agencies might participate and impose their own sanctions. This often occurs in environmental cases, where misconduct could negatively impact both the environment and the company’s investors. To understand how related actions operate and the potential for your case to initiate one, refer to Rule 25.

Related action payments are available under most whistleblower reward laws:

• See Rules 16–25

The SEC discussed related actions at:

• 76 Federal Register 34300 (June 13, 2011)

The SEC rule covers both securities frauds and reports concerning the Foreign Corrupt Practices Act.

The CFTC discussed related actions at:

• 76 Federal Register pgs. 53179-80 (Aug. 25, 2011)

Among the least understood applications of the “related action” laws concerns the right of whistleblowers to make disclosures to Self-Regulatory Organizations (SROs) and qualify for a related action reward based on sanctions issued by these SROs. Thus, whistleblowers who provide information to SROs such as FINRA can obtain a reward for fines or sanctions issued by FINRA, if the SEC also sanctions the company over $1 million. The SEC defines covered SROs as:

1. any national securities exchange
2. registered securities association
3. registered clearing agency
4. the Municipal Securities Rulemaking Board
5. 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 covered SROs include “national securities exchanges,” such as the BOX Exchange LLC, Cboe BYX Exchange, Inc., Cboe Exchange, Inc., Investors Exchange LLC, Long-Term Stock Exchange, Inc., MEMX, LLC; Miami International Securities Exchange; MIAX Emerald LLC; MIAX PEARL, LLC; Nasdaq BX, Inc.; The Nasdaq Stock Market; New York Stock Exchange LLC; NYSE Arca, Inc.; NYSE Chicago, Inc.; NYSE American LLC; and the NYSE National, Inc.; CBOE Futures Exchange, LLC; Chicago Board of Trade; One Chicago, LLC and the Financial Industry Regulatory Authority (FINRA). The following registered clearing agencies are also included within the definition of an SRO: The Depository Trust Company (“DTC”); National Securities Clearing Corporation (“NSCC”);Fixed Income Clearing Corporation (“FICC”);The Options Clearing Corporation (“OCC”);ICE Clear Credit LLC (“ICC”); ICE Clear Europe Limited (“ICEEU”); and the LCH SA. The Municipal Securities Rulemaking Board is also classified as a covered SRO.