On February 27, the National Whistleblower Center, Sherron Watkins, Dr. Aaron Westrick, and Erika Cheung filed a joint amicus curiae brief to the U.S. Court of Appeals for the Eleventh Circuit in John Doe et al v. U.S. Securities Exchange Commission, arguing that the whistleblowers in the case should not have been denied an award.
The case concerns two whistleblowers who published reports online alleging misconduct by their company. While the whistleblowers filed a timely tip with the SEC, the SEC found the whistleblowers’ reports online independently and began an investigation based on those publicly available reports rather than the whistleblowers’ filing. In denying the whistleblowers an award, the SEC held that the information they provided had not “led to” a successful enforcement action, even though the enforcement action was based on reports written and published by the whistleblowers, and the whistleblowers included those reports in their Commission filing.
The amici argue that the SEC’s denial overlooks the central issue: under Dodd-Frank, the “original source” exception means whistleblowers remain eligible for awards even if the SEC learns of their allegations through the media, so long as the whistleblower was the original source of that information. The amici emphasize that Congress modeled these provisions on the False Claims Act and the IRS Whistleblower Program, both of which also protect original source whistleblowers even when information first appears in the news media.
The brief also notes that the SEC’s ruling reflects the logic of the “jurisdictional bar,” a rule present in an earlier version of the FCA that denied awards to whistleblowers when the government already possessed the information, for any reason, including if the government had seen it in the media. This rule, however, was repealed in 1986, and Dodd-Frank was explicitly based on the version of the FCA that rejected the jurisdictional bar. Amici argue this history means that the SEC’s decision “contravenes decades of Congressional lawmaking and ignores the plain meaning of ‘original information’ and its modifying term ‘original source’ as used in Dodd-Frank and its implementing regulations.”
Finally, the brief points out that the SEC’s decision directly contradicts the Commission’s own regulations, which also include the original source exception.
Several leading whistleblower advocacy groups also filed amicus briefs in this case, including The Anti-Fraud Coalition, Government Accountability Project, Whistleblower Aid, The Signals Network, and Better Markets. The SEC’s response brief in this case is due April 24th.
