Covered Action
The term “covered action” or “notice of covered action” refers to an administrative or judicial decision that, combined with other decisions, results in more than $1 million in monetary sanctions. Major whistleblower programs use the term “covered action” to give a motive when a case is eligible for a reward.
The Securities and Exchange Commission posts Notices of Covered Action for each SEC action were a final judgment, by itself or combined with other judgments in the same action issued after July 21, 2010, resulting in monetary sanctions exceeding $1 million. The SEC has indicated that posting of a Notice only determines that an order was entered with monetary sanctions exceeding $1 million, not that a whistleblower tip was involved in opening the investigation or that a whistleblower will receive a reward in connection with the case. Whistleblowers who voluntarily provided the SEC with original information that led to the enforcement of a covered action are eligible to apply for a whistleblower award.
Once the Notice of Covered Action is posted, whistleblowers have 90 days to apply for an award by submitting a completed Form WB-APP to the Office of the Whistleblower. The award applications are encouraged to be submitted by email, but they can also be submitted by mail and fax. The SEC has stated that submissions are generally acknowledged within 60 days.
Commodities Futures Trading Commission (CFTC)
The Commodities Futures Trading Commission (CFTC) can issue a Notice of Covered Action when there is a final judgment or settlement that results in more than $1 million in monetary sanctions. A Note of Covered Action can be issued by itself or together with other judgments or orders in the same action.
A whistleblower must submit a Form WB-APP within a 90-day period after a Notice of Covered Action has been issued. Whistleblowers are also encouraged to check periodically after submitting a tip. The CFTC will not post notices about Related Actions, but they will issue Press Releases determining if an individual is eligible for a reward. Whistleblowers can apply for a CFTC Covered Action award and multiple Related Action awards using the Form WB-APP.
