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The Securities and Exchange Commission Awards Whistleblower

The SEC Whistleblower Program (the “Program”), which became a final rule on August 12, 2011, provides incentives and protection to whistleblowers who provide the SEC with original information about violations of the federal securities laws. Under the Program, an “eligible whistleblower” is entitled to an award of between 10% and 30% of the monetary sanctions collected in actions brought by the SEC or other regulatory and law enforcement authorities.In accordance with Section 21F-2 of the Securities Exchange Act of 1934, an eligible whistleblower is defined as a person who “voluntarily” provides the SEC with “original information” about a possible violation of the federal securities laws that has occurred, is ongoing or is about to occur. To benefit from the Program, the information must lead to a successful SEC action resulting in an order of monetary sanctions exceeding $1million.The first payout from the Program to a whistleblower was ordered on May 18, 2012. The award recipient, who does not want to be identified, will receive 30 percent of the amount collected in an SEC enforcement action which helped the SEC stop a multi-million dollar fraud. The recipient will receive nearly $50,000 for their assistance.While any submission to the SEC can be submitted anonymously, you must have an attorney represent you in connection with your submission, along with other requirements, as stated in Rule 21F-7. Whether you seek anonymity or not, the SEC will strive to protect your identity to the fullest extent possible, subject to some limitations. In addition to incentives, the Program provides protection to whistleblowers in case any employer retaliates against them for reporting information to the SEC.Before submitting a whistle blowing tip, it is imperative to consult with counsel to vet all potential impacts and considerations. For further information on the Program, please visit the SEC's FAQ or contact Andrew Deddeh at (619) 298-2880 or andrew.deddeh@jackolg.com.

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