The SEC awarded more than $2.2 million to a former company insider who voluntarily provided critical information to another federal agency before reporting it to the SEC, and whose report led to a significant SEC enforcement action. This is the first of its kind paid under the “safe harbor” provision of Exchange Act Rule 21F-4(b)(7).

The safe harbor provision of the Rule provides a 120-day grace period for reporting to the SEC, offering assurance to whistleblowers who report information to other federal agencies before submitting the same information to the SEC.

Ordinarily, to be treated as a whistleblower an individual must voluntarily report original information to the SEC. Under this provision, however, a whistleblower who first reports to another federal agency, but also reports it to the SEC within 120 days of that, is not disqualified from SEC whistleblower award eligibility.

The rule change is intended to avoid penalizing a whistleblower for reporting to the “wrong” agency, or for reporting to more than one.

More at Saul Ewing Arnstein & Lehr LLP