In a surprising move, the SEC overturned its prior denial and awarded Kyle Bass $400,000 for providing information that helped the agency secure civil penalties against certain UDF executives. Notably, this is the first time the SEC has reversed a denial of a whistleblower award.
The SEC had initially concluded that Bass was ineligible for a whistleblower award because he acted on behalf of Hayman Capital Management, rather than in his capacity as an individual tipster. Bass sued and the issue was taken to the Fifth Circuit Court of Appeals.
However, in an unusual move, the SEC asked the appeals court to return the case so it could re-evaluate its decision, admitting it may have misinterpreted an “ambiguous” email from Bass’s attorney. The SEC has now acknowledged that Bass did, in fact, act as an individual whistleblower as required by SEC Whistleblower regulations.
Additionally, the SEC reversed itself on another issue related to Bass’s claim. In its original ruling, the SEC declined to waive its requirement that all whistleblower tipsters must file their information through its online Tips, Complaints and Referrals system (TCRs). The SEC previously found that Bass had not provided a sufficient reason for failing to submit the tip form online; however, in its recent ruling, it granted Bass a waiver from this requirement.
SEC whistleblowers may be entitled to between 10% and 30% of any money recovered by the SEC on a judgment ordering monetary relief of $1 million or more.
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Silver Law Group and the Law Firm of David R. Chase jointly have experienced SEC whistleblower lawyers, including a former SEC Enforcement attorney on the team. Our SEC whistleblower attorneys can help you if you have information regarding false filings, securities or investment fraud, violations of federal securities laws, market manipulation, or other misconduct. You must provide timely, credible, and original information or analysis to be eligible. Contact us through our online form or at (800) 975-4345 for a consultation. Our attorneys work on a contingency fee basis, so it costs you nothing to hire us, and we collect our fees only if you receive an SEC bounty. We have the incentive to help you collect the maximum award available because we only get paid when you do.