The Securities and Exchange Commission (“SEC”) has denied one of the four claims for whistleblower award payments submitted in connection with the matter SEC v. Andrey C. Hicks and Locust Offshore Management, LLC.
In October 2011, the SEC filed an enforcement action against Locust Offshore Management, LLC and Andrey C. Hicks alleging that it was running a fictitious pooled investment fund (“Locust Matter”.) On March 20, 2012, the United States District Court for the District of Massachusetts entered a Final Judgment against Locust and Hicks ordering the disgorgement of $2,512,058 and also imposing a civil penalty of $2,512,058 against each defendant.
Shortly after the Final Judgment was entered, the SEC posted a Notice of Covered Action relating to the Locust Matter. Thereafter, four individuals filed timely claims for whistleblower awards pursuant to section 21F of the Securities Exchange Act of 1934, 12 U.S.C. § 78u-6.
According to the Order Determining Whistleblower Award Claim entered by the SEC, it granted the requests by individuals 1, 2 and 3 for payment of whistleblower awards, but denied the claim submitted by individual 4. The Order states that the SEC found that individuals 1, 2 and 3 each provided original information that led to the successful enforcement of the Locus Matter and stated that each would receive an award equal to 5% of the monetary sanctions collected in the Locust Matter.
According to the SEC, it denied the claim by individual 4 because the information voluntarily provided by individual 4 did not contain any information on the Locust Matter or even mention either of the Locust defendants. In addition, the SEC claims the information did not assist or contribute to the SEC’s investigation or successful enforcement action in the Locust Matter.
A copy of the SEC’s Order can be read here.