Securities Regulation Daily Wrap Up, WHISTLEBLOWER NEWS—D.C. Cir.: Court upholds denial of award to internal whistleblower, (May 13, 2026)

By Anne Sherry, J.D.

The whistleblower did not report information to the SEC during its investigation, much less within 120 days of her internal complaint.

The D.C. Circuit upheld the SEC’s denial of a whistleblower award. The court concluded that the SEC did not abuse its discretion in declining to exempt the whistleblower from the requirement to submit information to the SEC within 120 days of reporting the wrongdoing internally. The appeals court also could not consider two of the petitioner’s arguments because she did not raise them before the SEC (Doe v. SEC, No. 25-1122 (D.C. Cir. May 8, 2026)).

Jane Doe filed an internal complaint alleging misconduct by her employer, and her employer in turn reported the allegations to the government. The SEC investigated and recovered a penalty against the company. Only after the penalty did Doe submit her allegations to the SEC.

The SEC denied Doe’s award claim because she did not submit information to the SEC within 120 days of her internal report, as required by Dodd-Frank Rule 21F-4(c)(3). The Commission also declined to grant an exemption from the 120-day deadline because Doe failed to provide information at any time during the agency’s investigation.

On a petition for review of the SEC’s denial, the D.C. Circuit concluded that the SEC did not abuse its discretion. An agency’s decision not to waive its rules is entitled to significant deference and should be set aside only when its reasoning is insubstantial. Here, the SEC’s reasoning was directly keyed to Dodd-Frank’s explicit instruction that a whistleblower provide information to the agency. In all the cases Doe cited where the SEC granted exemptions, the claimants had submitted information to the agency before the enforcement action.

Doe also raised two unpreserved arguments: that the rule setting forth when information could have “led to” a successful action impermissibly narrows the governing statute and that due process was violated because she lacked knowledge of the need to report information to the SEC. The court could not consider these arguments because Doe failed to raise them before the SEC.

The case is No. 25-1122.

Judge: Per curiam.

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