On August 31, the U.S. Securities and Exchange Commission (SEC) posted fifteen new Notices of Covered Actions (NoCAs). Each NoCA relates to a successful enforcement action and signals that individuals may now file whistleblower award claims for those cases.
The newly posted NoCAs cover a wide range of enforcement actions and highlight the numerous types of corporate fraud and misconduct for which individuals can be awarded for blowing the whistle. One NoCA is for an enforcement action in which the SEC charged a subsidiary of Teachers Insurance and Annuity Association of America (TIAA) with violations in retirement rollover recommendations. The subsidiary, TIAA-CREF Individual & Institutional Services LLC (TC Services), will pay the SEC $97 million to settle charges that it made inaccurate and misleading statements and failed to adequately disclose conflicts of interest.
A second NoCA is for an enforcement action in which the SEC charged Amec Foster Wheeler, a British multinational consultancy, engineering, and project management company, with violations of the anti-bribery provisions of Foreign Corrupt Practices Act (FCPA). Amec Foster Wheeler is to pay the SEC $43 million to settle the charges. The charges stem from a scheme in which Amec Foster Wheeler paid bribes to Brazilian officials in exchange for an approximately $190 million contract to design a gas-to-chemicals complex.
A third NoCA covers an enforcement action taken against an electronic trading platform for operating as an unregistered broker-dealer. The SEC charged Neovest Inc., a subsidiary of JPMorgan Chase & Co., with operating an order and execution management system (OEMS) as an unregistered broker-dealer. Neovest is to pay the SEC a $2.75 million penalty. According to the SEC, this is the agency’s first case charging an OEMS provider for operating as an unregistered broker-dealer.
Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the SEC original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government. By posting an NoCA, the SEC is not making any determination that the relevant case was aided by a whistleblower tip. Rather, the SEC posts an NoCA for any enforcement action that results in monetary sanctions exceeding $1 million.
The 2021 fiscal year has been a record year for the SEC Whistleblower Program. Since the fiscal year began on October 1, 2020, the SEC has awarded approximately $397 million to 97 individuals – both fiscal year records. Early in the fiscal year the SEC also set a record for the largest award in program history when it issued a $114 million award.