Kilgour v. United States Securities and Exchange Commission

18‐1124(L)
Kilgour v. United States Securities and Exchange Commission
18‐1124(L)
Kilgour v. United States Securities and Exchange Commission
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2018 3
(Argued: January 22, 2019 Decided: November 8, 2019) 4
Docket Nos. 18‐1124, 18‐1127 5
6
7
C OLIN KILGOUR , D ANIEL WILLIAMS, JOHN D OE 8
Petitioners, 9
v. 10
U NITED S TATES S ECURITIES AND E XCHANGE C OMMISSION, 11
Respondent. 12
13
14
Before: K EARSE , SACK, L IVINGSTON, Circuit Judges. 15
These two petitions—one by John Doe, the other by Colin Kilgour and 16
Daniel Williams—are from the denial by the United States Securities and 17
Exchange Commission of ʺwhistleblowerʺ awards. The petitioners sought the 18
awards following a $50 million settlement the SEC reached with Deutsche Bank 19
AG that resolved an enforcement action against the bank. The petitioners assert 20
that the SEC erred in basing the denials of their claims on its determination that 21
the petitioners did not provide ʺoriginal information that led to a successful 22

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enforcement action,ʺ a prerequisite for obtaining a whistleblower award under 1
the Securities Exchange Act and the SEC’s regulations implementing the Act; and 2
that the SEC erred procedurally during its decision‐making process. We 3
disagree. The petitions are therefore DENIED. 4
C OLIN KILGOUR , Toronto, Ontario, Canada, 5
Pro se Petitioner. 6
Daniel Williams, Toronto, Ontario, Canada, 7
Pro se Petitioner. 8
D AVID E. K OVEL , Kirby McInerney LLP, 9
New York, NY, for John Doe, Petitioner. 10
WILLIAM K SHIREY (Robert B. Stebbins, 11
Stephen Yoder, Michael A. Conley, on the 12
brief), for the United States Securities and 13
Exchange Commission, Washington, D.C., 14
Respondent. 15
16
S ACK, Circuit Judge: 17
18
In 2015, the United States Securities and Exchange Commission (the ʺSECʺ) 19
reached a settlement agreement with Deutsche Bank AG (ʺDBʺ) after the SEC 20
discovered misstatements in DBʹs financial statements. Previously, between 2010 21
and 2014, while the SEC was investigating DB, petitioners ʺJohn Doe,ʺ1 Colin 22
Kilgour, and Daniel Williams disclosed information to the SEC that they thought 23
1 We have adopted the partiesʹ practice of keeping John Doe and two other claimantsʹ
identities confidential.

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would be helpful to that investigation. After the settlement, the petitioners filed 1
applications with the SEC for ʺwhistleblowerʺ awards. Their applications were 2
denied. 3
The petitioners ask that we set aside the SEC's denial of their award 4
applications and instruct the SEC to issue whistleblower awards to them based 5
on the value of the information provided to the SEC. For the reasons that 6
follow, we deny the petitions. 7
BACKGROUND 8
I. The Deutsche Bank Case and Settlement 9
During 2005 and 2006, DB purchased $98 billion of leveraged super senior 10
tranches in more than thirty collateralized debt obligations (the ʺLSSʺ) as credit 11
protection. The LSS were leveraged eleven times, i.e., the sellers of the protection 12
posted only 9% of the total value of the LSS as collateral. In late 2008 and early 13
2009, DB began overvaluing the LSS by misstating in their financial records the 14
associated ʺgap riskʺ—the risk that the market value of its credit protection could 15
exceed the available collateral posted by the sellers. This overvaluation was 16
reflected in misstatements in DBʹs financial statements. On May 26, 2015, the 17
SEC both instituted agency cease‐and‐desist proceedings against DB with respect 18

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to these statements and accepted a settlement offer from DB in which DB agreed 1
to pay a penalty of $55 million. 2
II. The Investigation 3
Between 2010 and 2014, i.e., before the SEC cease‐and‐desist proceedings 4
were instituted, the SEC obtained information from several persons (the 5
ʺClaimantsʺ) regarding the potential wrongdoing by DB. Three of the 6
Claimants—John Doe, Colin Kilgour, and Daniel Williams – are the petitioners in 7
this case.2 8
a. John Doe 9
On or about June 7, 2010, the Enforcement Division of the SEC received 10
information from DB’s counsel, after Claimant 1, a DB employee, filed an internal 11
complaint, to the effect that DB was overstating the value of certain assets ʺto 12
improve the appearance of [DBʹs] financial performanceʺ to its shareholders, the 13
market and the investing public. Declaration of Amy Friedman, Assistant 14
Director of the SEC Enforcement Division, July 27, 2016 (ʺFriedman 15
Declarationʺ), at 3‐4; Joint Appendix (ʺJAʺ) 3086‐87. Following this disclosure, 16
the SEC opened an investigation of DB, and arranged for an in‐person interview 17
2 In this opinion, we refer to Claimants 1, 2, and 3. In doing so, we refer to persons
other than John Doe, Colin Kilgour, and Daniel Williams.

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with Claimant 1. According to the SEC, it was Claimant 1ʹs ʺearly identification 1
of the Gap Risk issue that led the enforcement staff to focus on [that] issue in its 2
investigation, and it was [that] issue that formed the cornerstone of the charges 3
ultimately brought by the [SEC] against [DB] in the enforcement action.ʺ Id. at 3; 4
JA 3087. 5
On September 30, 2010, petitioner John Doe met with enforcement staff 6
from the SECʹs Complex Financial Instruments Unit (ʺCFIUʺ), a group that was 7
part of the SECʹs Enforcement Division but whose membership did not overlap 8
with the team working on the DB matter (ʺDB teamʺ). The SEC and Doe offer 9
different characterizations of this meeting. According to a declaration provided 10
by the Deputy Chief of the CFIU, Reed Muoio: ʺ[Doe] appeared to be very 11
disjointed and had difficulty articulating credible and coherent information 12
concerning any potential violation of the federal securities laws . . . . [He] 13
brought with [him] to the meeting a wet brown bag containing what [he] claimed 14
to be evidence.ʺ Declaration of Reid Muoio, Deputy Chief of CFIU, July 11, 2017 15
(ʺMuoio Declarationʺ), at 1; JA 4059. 16
Doe, for his part, contends that he provided credible, helpful information. 17
For example, he asserts that during his meeting with the CFIU he gave a 18

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presentation that explained how certain restructuring efforts by DB would 1
reshape the gap risk of the LSS. Doe sent several follow‐up emails to the CFIU 2
staff in October 2010, but Deputy Chief Muoio and his staff had concluded that 3
Doe was ʺnot a credible source of information.ʺ Id. Having so concluded, Muoio 4
and his staff declined to forward emails they received from Doe to other staff in 5
the Division of Enforcement. Id. Meanwhile, the SEC assigned two TCR 3 6
numbers (numbers used to track whistleblower tips in its database) to Doe. 7
In March 2011, Claimant 2 began providing the DB team with information 8
concerning DBʹs gap risk calculations and made multiple submissions to the 9
team in June and July 2011. The DB team found Claimant 2 to be a highly 10
credible source of information, and the information that Claimant 2 provided 11
proved, according to SEC enforcement officials, to be invaluable to their 12
investigation of DB. 13
On July 29, 2011, Doe sent another email to the CFIU staff, which they 14
forwarded to the DB team on August 3, 2011. This was the first time the DB team 15
had seen any information provided by Doe. However, Doeʹs email contained ʺno 16
3 ʺTCRʺ stands for ʺTip, Complaint or Referral.ʺ See United States Securities and
Exchange Commission, Form TCR (Aug. 2011), https://www.sec.gov/files/formtcr.pdf.

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new information and did not help advance the [DB] [i]nvestigation.ʺ Friedman 1
Declaration, at 8; JA 3092. 2
In November 2011 and December 2012, Claimant 2 made two additional 3
submissions which were both considered by SEC enforcement personnel to be 4
helpful to the DB team. The submissions provided information about how the 5
gap risk calculation affected DBʹs results on their late 2008 and early 2009 6
financial statements, and how something called the ʺMontreal Accordʺ affected 7
the gap risk calculation. At that point, the DB team had received no such 8
information from Doe. 9
On March 11, 2013, Doe made additional submissions to the DB team, 10
including the email message that he had sent to the CFIU staff back in October 11
2010. But the DB team considered those submissions, like Doeʹs prior 12
submissions, to be unhelpful. At that point, ʺthe investigation had already been 13
ongoing for over two and a half years,ʺ and the information contained in Doeʹs 14
submission was ʺlargely duplicative of other information that [the DB team] had 15
already received or had learned.ʺ Friedman Declaration at 8; JA 3092. Doeʹs re‐ 16
sent October 2010 email, while referencing the Montreal Accord, ʺprovided very 17
little detailʺ and attached only ʺpublicly‐available documents.ʺ Additional 18

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Declaration of Amy Friedman, July 11, 2017 (ʺAddʹl Friedman Declarationʺ), at 7; 1
JA 3827. 2
On April 26, 2013, Doeʹs counsel contacted the DB team to inform them 3
that Doe ʺhad [additional] information that might aidʺ the investigation. Addʹl 4
Friedman Declaration, at 13; JA 3833. The DB team met with Doe but found the 5
information to be redundant. The DB team, like the CFIU in September 2010, 6
thought Doeʹs presentation was ʺvery difficult to follow, as [he] jumped from 7
topic to topic.ʺ Id. at 7. 8
On June 7, 2013, Doe made his final submission, attaching various internal 9
DB documents. Again, these documents were considered by the DB team to be 10
largely duplicative of documents the DB team had received from Claimant 2 or 11
from DB itself when it responded to SEC document requests, and therefore 12
unhelpful. 13
b. Colin Kilgour and Daniel Williams 14
On June 21, 2013, Claimant 2 submitted an expert report to the DB team, 15
which had been prepared by the Kilgour Williams Group (ʺKWGʺ), a consulting 16
firm owned by petitioners Colin Kilgour and Daniel Williams. According to the 17
DB team, this expert report was ʺdetailed and comprehensive,ʺ ʺabsolutely 18

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critical to [the] investigation,ʺ and used ʺin connection with [the] proffer session 1
with [DB] and ensuing settlement negotiations with the company.ʺ Id. at 9‐10. 2
After submitting the report, and until July 2014, KWG continued to provide 3
information to the SEC and to respond to questions from the DB team that 4
ʺallowed the [team] to strengthen the SECʹs position vis‐à‐vis [DB].ʺ Id. 5
In May 2014, Claimant 2 and his wife divorced. The state court overseeing 6
the divorce proceedings awarded half the proceeds of any whistleblower payout 7
Claimant 2 might receive to his wife. The court also ordered that Claimant 2 pay 8
ʺall costs and expenses he had incurred or will incur with . . . [KWG].ʺ State 9
Court Divorce Judgment August 10, 2015, at 10; JA 411. 10
On August 11, 2014, Claimant 2 authorized Kilgour and Williams to make 11
an independent whistleblower submission so that they too could claim an award 12
from the SEC. The next day, they jointly submitted an SEC Form TCR in an 13
attempt to attain whistleblower status. This Form TCR did not provide any new 14
information; it reiterated the information that KWG had been commissioned to 15
provide on behalf of Claimant 2 between June 2013 and July 2014 and which had 16
previously been supplied to the SEC. 17
18

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III. SEC Whistleblower Proceedings and the Award Order 1
After DB agreed to pay the $55 million civil fine to the SEC, nine 2
whistleblower claimants (including the three petitioners in the case at bar) came 3
forward to claim awards. On July 27, 2016, the SECʹs Claims Review Staff 4
(ʺCRSʺ) issued a Preliminary Determination (ʺPDʺ), as is required by Rule 21F‐ 5
10(d), recommending awards for Claimants 1 and 2 and rejecting all other 6
claimantsʹ applications. 7
Pursuant to SEC regulations, any claimant may submit ʺa written response 8
to the Office of the Whistleblower setting forth the grounds for [an] objection to 9
either the denial of an award or the proposed amount of an award.ʺ Rule 21F‐ 10
10(e). To facilitate such objections, the SEC also permits claimants to request to 11
review the materials ʺthat formed the basis of the . . . [PD].ʺ Rule 21F‐10(e)(1)(i). 12
After the issuance of the PD, Doe requested that the CRS produce all 13
materials upon which it based its PD. The CRS produced a record consisting of 14
Doeʹs own submissions to the SEC and the Friedman Declaration, dated July 27, 15
2016. The declaration set forth the timing of the CFIU intake and subsequent 16
forwarding of Doeʹs information to the DB team, asserting that by the time the 17
DB investigators received Doeʹs information, it was duplicative of information 18

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that was publicly available or that they had already received from other sources 1
(primarily Claimant 2). 2
Doe objected to the PD on several grounds, arguing that the CFIU staff 3
should have forwarded his information to the DB investigators and that it was 4
unfair for the SEC to penalize him for their failure to do so; that the CRS should 5
have provided Doe with the other Claimantsʹ materials on which Friedman had 6
relied in preparing her declaration; and that Doe had, in any event, submitted 7
important, original information, and therefore deserved credit as a source of that 8
information. The SEC responded with the Muoio Declaration and a second 9
declaration from Friedman. 10
On November 30, 2017, the SEC issued an ʺOrder Determining 11
Whistleblower Award Claimsʺ for the DB matter. SPA 1. Under the order, 12
Claimant 1 and Claimant 2 were each to receive an award of about $8 million. 13
Each of the other claimants — including these petitioners — would not receive 14
an award. 15
With respect to Doeʹs application, the SEC determined that ʺthe 16
information provided by [Doe] was not of a higher quality than the information 17
provided by Claimant #2 (or Claimant #1)ʺ and that ʺthe [DB team] received 18

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information from Claimant 2 (as well as Claimant 1) before receiving any 1
information from [Doe].ʺ SEC Order, November 30, 2017, SPA 16. The SEC 2
therefore concluded that ʺthe record firmly demonstrates that [Doe] did not 3
provide information that led to the success of the [DB action].ʺ Id. 4
Regarding Kilgourʹs and Williamsʹs claim, the SEC found, inter alia, that 5
the information the two had included in their August 2014 Form TCR was not 6
ʺoriginal informationʺ because the SEC already had obtained it from Claimant 2 7
in his submissions. The SEC further decided that neither petitioner qualified as 8
the ʺoriginal sourceʺ of that information because they had both previously 9
interacted with the SEC in their capacity as Claimant 2ʹs experts. The SEC also 10
determined that Kilgourʹs and Williamsʹs Form TCR submission did not lead to 11
the success of the enforcement action. 12
DISCUSSION 13
The petitioners Doe, Kilgour, and Williams now ask us to overturn the 14
SECʹs denials of their ʺwhistleblowerʺ4 award applications. We must address 15
4 The Securities Exchange Act provides, in relevant part:
The term ʺwhistleblowerʺ means any individual, or 2 or more individuals
acting jointly, who provides information relating to a violation of this Act

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four issues in order to resolve the petitions: First, whether the SEC can, should, 1
or must be equitably estopped from denying Doe his requested whistleblower 2
award. Second, whether the SEC violated Doeʹs Due Process rights by failing to 3
provide him with materials to which he asserts he was entitled in order to 4
contest the CRSʹs PD. Third, whether the SEC acted arbitrarily and capriciously 5
in granting an award to Claimant 2, but not Doe. And fourth, whether Kilgour 6
and Williams were entitled to a whistleblower award for the information that 7
they submitted. 8
I. Standard of Review 9
We review the Commissionʹs whistleblower award determinations ʺin 10
accordance with section 706 of [the Administrative Procedure Act].ʺ 15 U.S.C. 11
§ 78u‐6(f). Accordingly, this Court may set aside an agency action if it is 12
ʺarbitrary, capricious, an abuse of discretion, or otherwise not in accordance with 13
the law,ʺ or if it is ʺunsupported by substantial evidence.ʺ 5 U.S.C. § 706(2)(A) & 14
(E). Section 702(2)(A) provides for ʺa deferential standard of reviewʺ where ʺwe 15
cannot substitute our judgment for that of the agency.ʺ Nat. Res. Def. Council, Inc. 16
to the Commission, in a manner established by rule or regulation by the
Commission.
15 U.S.C. § 78u‐6(a)(6).

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v. FAA, 564 F.3d 549, 555 (2d Cir. 2009). In reviewing the SECʹs findings of fact 1
for ʺsubstantial evidenceʺ we require that they be supported by ʺmore than a 2
scintilla of evidence,ʺ which may be ʺless than a preponderance.ʺ Cellular Tel. Co. 3
v. Town of Oyster Bay, 166 F.3d 490, 494 (2d Cir. 1999). 4
II. Legal Framework 5
In 2010, as part of the Dodd‐Frank Act, Congress amended the Securities 6
Exchange Act of 1934 to establish a whistleblower award program. See 15 U.S.C. 7
§ 78u‐6. Under this program, the SEC ʺshall pay an award or awards to 1 or 8
more whistleblowers who voluntarily provided original information to the 9
Commission that led to the successful enforcement of [a] covered judicial or 10
administrative action.ʺ Id. § 78u‐6(b)(1). To be eligible for an award, a 11
whistleblower must submit information in accordance with the SECʹs rules and 12
regulations. Id. § 78u‐6(a)(6), (c)(2)(D); see also id. § 78u‐6(j) (authorizing the SEC 13
to issue rules and regulations to implement the program). 14
In 2011, the SEC adopted rules establishing the procedures and criteria for 15
whistleblower awards. See Securities Whistleblower Incentives and Protections, 16
76 Fed. Reg. 34,300 (June 13, 2011) (codified at 17 C.F.R. Parts 240 and 249). 17
These rules limit awards to whistleblowers who ʺvoluntarily provide the 18

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Commission with original information that leads to the successful enforcement 1
by the Commission of a Federal court or administrative action.ʺ 17 C.F.R. § 2
240.21F‐3(a). 3
ʺOriginal informationʺ is defined as information ʺ[n]ot already known to 4
the Commission from any other source, unless [the applicant is] the original 5
source of the information.ʺ 17 C.F.R. § 240.21F‐4(b)(1)(ii). The SEC considers an 6
applicant to be an ʺoriginal sourceʺ of information that the SEC has obtained 7
from another source if ʺthe other source obtained the information from [the 8
applicant or her] representative.ʺ Id. § 240.21F‐4(b)(5). The rules further define 9
information ʺlead[ing] to successful enforcementʺ as information that (1) ʺwas 10
sufficiently specific, credible, and timely to causeʺ the SEC to open, reopen, or 11
expand an examination or investigation, leading to a ʺsuccessful judicial or 12
administrative action based in whole or in part on conduct that was the subject of 13
[the applicantʹs] original information,ʺ or (2) concerned ʺconduct that was 14
already under examination or investigationʺ and its ʺsubmission significantly 15
contributed to the success of the action.ʺ Id. § 240.21F‐4(c)(1)‐(2). ʺA 16
whistleblower must be an individual. A company or another entity is not 17
eligible to be a whistleblower.ʺ Id. § 240.21F‐2(a)(1). 18

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Rule 21F‐9 governs the procedures for submitting information as the basis 1
of a claim for a whistleblower award. 17 C.F.R. § 240.21F‐9; see also id. § 240.21F‐ 2
2(a)(2) (eligibility for awards conditioned on compliance with these procedures, 3
among others). It provides that to be considered a whistleblower for these 4
purposes, an individual must submit her or his information to the SEC through 5
the SECʹs website or in a ʺForm TCR (Tip, Complaint or Referral)ʺ mailed or 6
faxed to the SEC. Id. § 240.21F‐9(a). This submission must be accompanied by a 7
declaration ʺunder penalty of perjury . . . that [the] information [provided] is true 8
and correct to the best of [the claimantʹs] knowledge and belief.ʺ Id. § 240.21F‐ 9
9(b). ʺ[T]he Commission may, in its sole discretion, waive any of these 10
procedures based upon a showing of extraordinary circumstances.ʺ Id. 11
§ 240.21F4‐8(a). 12
III. Can the SEC Be Equitably Estopped from Denying Doeʹs 13
Whistleblower Award? 14
15
Doe does not contest the SECʹs factual determination that when the DB 16
team received his submissions, the information was duplicative of information 17
the team had already obtained from other sources. Doe argues, though, that ʺthe 18
Commission should be equitably estopped from claiming it did not rely on Doeʹs 19
September/October 2010 submissions and be directed to issue an award based on 20

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the contribution that information made to their investigation (when provided by 1
other sources).ʺ Petʹr Doe Br. 33. In other words: Doe argues that 2
notwithstanding the fact that his submissions did not contribute to the success of 3
the enforcement action against DB, he should be entitled to a whistleblower 4
award because the information in those submissions did. We disagree. 5
In Office of Personnel Management v. Richmond, 496 U.S. 414 (1990), the 6
Supreme Court concluded that ʺa claimant may not assert a monetary claim of 7
estoppel against the government when the funds used to pay this claim will 8
come from the Federal Treasury, but are not authorized by statute.ʺ Dun & 9
Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189, 195 (2d Cir. 1991) (citing 10
Office of Personnel Management v. Richmond, 496 U.S. at 423‐25.). ʺAccordingly, an 11
estoppel claim that will require the payment of government funds in 12
contravention of a statute will fail.ʺ Id. This is such a claim. 13
First, the funds for the award that Doe requests would come from the 14
Securities and Exchange Commission Investor Protection Fund in the Federal 15
Treasury, as do all SEC whistleblower awards. See 15 U.S.C. § 78u‐6(g)(1) (ʺThere 16
is established in the Treasury of the United States a fund to be known as the 17
ʹSecurities and Exchange Commission Investor Protection Fundʹʺ). 18

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Second, if we were to grant Doe’s petition on the grounds of equitable 1
estoppel, we would be compelling the SEC, in effect, to issue Doe an award that 2
is not authorized by statute. In his reply brief, Doe argues that awarding him 3
whistleblower funds would not contravene the Securities Exchange Act because 4
the relief sought—granting Doeʹs award application—is authorized by statute. 5
He contends that ʺ[i]n crediting the provider of the original information the 6
statute . . . requires that the SEC ʹshall payʹ for ʹoriginal informationʹ that led to a 7
successful conclusion.ʺ Pet’r Doe Reply 11. Doe argues that therefore, ʺso long 8
as a claimant provided original information, and that information aided a 9
successful enforcement action, payment is authorized and non‐discretionary.ʺ Id. 10
Not so. 11
We do not decide whether that the SEC erred in its determination that Doe 12
was not credible. As the SEC notes, the ʺCFIU staff and the DB team reached 13
generally similar conclusions that Doe did not have helpful information 14
regarding Deutsche Bank.ʺ SEC Br. at 30. But even if we assume that some of the 15
information Doe provided was also provided by Claimant 2 and ultimately led to 16
the success of an enforcement action, the statute does not authorize the SEC to 17
give Doe an award under the circumstances. 18

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ʺWhen Congress has entrusted rulemaking authority under a statute to an 1
administrative agency, we evaluate the agencyʹs implementing regulations under 2
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).ʺ 3
Encarnacion ex rel. George v. Astrue, 568 F.3d 72, 78 (2d Cir. 2009); see also Stryker v. 4
SEC, 780 F.3d 163, 165 (2d. Cir. 2015) (applying the ʺfamiliar two‐step framework 5
set forth in Chevronʺ to review the SECʹs denial of a whistleblower award where 6
the ruling was based on rules promulgated by the SEC to implement the Dodd‐ 7
Frank Act). ʺChevron requires us to apply a two‐step inquiry to an agencyʹs 8
interpretation of a statute. At the first step of the analysis, a reviewing court 9
must ask whether Congress has directly spoken to the precise question at issue.ʺ 10
Cappetta v. Commʹr of Soc. Sec. Admin., 904 F.3d 158, 166 (2d Cir. 2018) (internal 11
quotation marks omitted). ʺIf the statute is ambiguous, then at the second step 12
the question for the court is whether the agencyʹs answer is based on a 13
permissible construction of the statute . . . in other words, whether the agencyʹs 14
interpretation is reasonable.ʺ Id. (internal quotation marks omitted). 15
The Act provides that the Commission ʺshall pay an awardʺ to a 16
whistleblower ʺwho voluntarily provided original information to the 17
Commission that led to the successful enforcement of the covered judicial or 18

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administrative action.ʺ 15 U.S.C. § 78u‐6(b)(1). The statute thus seems to require 1
that the information as provided by the whistleblower must have ʺled to the 2
successful enforcement action.ʺ And, assuming arguendo that Dodd‐Frank is 3
ambiguous on this question, ʺwe defer to the SECʹs interpretation of Dodd‐Frank 4
at Step 2.ʺ Stryker, 780 F.3d at 166. The SEC has enacted Rule 240.21F‐4(c), which 5
clarifies what is meant by ʺinformation that leads to a successful enforcement.ʺ 6
17 C.F.R. § 240.21F‐4(c). According to the Rule, a whistleblower satisfies this 7
statutory command if he provides original information in a ʺsubmissionʺ which 8
itself ʺsignificantly contributed to the success of the action.ʺ Id. § 240.2F‐4(c)(2). 9
The SECʹs answer, that it is a whistleblowerʹs submission that must contribute to 10
the successful action, is thus ʺbased on a permissible construction of the statute.ʺ 11
Chevron, 467 U.S. at 843. 12
Applying Chevron, we conclude that the interpretation of ʺinformation . . . 13
that led toʺ in 15 U.S.C § 78u‐6(b)(1) by the SEC is reasonable. First, Congress has 14
not ʺdirectly spoken to the precise question at issue.ʺ Chevron, 467 U.S. at 842. 15
Section 78u‐6 says nothing about whether a whistleblower can be given an award 16
if their submission was not used by the SEC to bring a successful enforcement 17
action. Second, the SECʹs answer—that it is a whistleblowerʹs submission that 18

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must contribute to the successful action—is ʺbased on a permissible construction 1
of the statute.ʺ Id. at 843. 2
Doe asks us to disregard the SECʹs interpretation of ʺinformation . . . that 3
led to,ʺ and instead declare that a whistleblower need not worry about curating a 4
useful submission. All a whistleblower must do to be entitled to an award, Doe 5
contends, is give some useful information to the SEC first, in any form, no matter 6
how impenetrable. Consider an example: Whistleblower A submits to the SEC 7
one‐thousand pages of scrambled documents, informing the SEC only that some 8
incriminating information lies within that might prove useful to an ongoing 9
investigation. Several weeks later, Whistleblower B submits to the SEC a single 10
incriminating document, 10 pages in length, and explains in an attached 11
memorandum why the document is incriminating and useful to an ongoing 12
investigation. The SEC uses Whistleblower Bʹs submission, and the ongoing 13
investigation ultimately concludes in a successful enforcement action. According 14
to Doeʹs interpretation, it would seem, as long as Whistleblower Aʹs submission 15
contained the information passed along by Whistleblower B, Whistleblower A is 16
entitled to an award. We disagree. 17

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
22
The interpretation that Doe asks us to adopt misreads the statute and 1
would lead to consequences not likely intended by Congress. The whistleblower 2
program was enacted ʺto motivate people who know of securities law violations 3
to tell the SEC.ʺ Digital Realty Tr., Inc. v. Somers, 138 S. Ct. 767, 777 (2018) 4
(internal quotation marks and emphasis omitted). ʺBy enlisting whistleblowers 5
to assist the Government [in] identify[ing] and prosecut[ing] persons who have 6
violated securities laws, Congress undertook to improve SEC enforcement and 7
facilitate the Commissionʹs recover[y] [of] money for victims of financial fraud.ʺ 8
Id. (internal quotation marks omitted; brackets in original). 9
As the foregoing example suggests, Doeʹs interpretation might 10
disincentivize whistleblowers from curating their submissions. The SECʹs 11
interpretation, by contrast, strikes a sensible balance between care and 12
timeliness, one that is more consistent with the whistleblower programʹs 13
purpose: A whistleblower might still be rewarded for being the first to bring 14
incriminating information to the SECʹs attention, but only if that information is 15
contained in a credible, and ultimately useful submission. 16
In sum, it was not arbitrary or capricious for the SEC to conclude that 17
Doeʹs submissions did not provide ʺoriginal information to the Commission that 18

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
23
led toʺ a successful enforcement action, 15 U.S.C. § 78u‐6(b)(1), because Doeʹs 1
submissions were not used by the DB team. The award Doe asks us to compel by 2
equitable estoppel in this case is therefore not authorized by statute, and because 3
that award would come from the Federal Treasury, Office of Personnel 4
Management forecloses Doeʹs claim. 5
IV. Did the SEC Violate Doeʹs Due Process Rights by Failing to Provide 6
Doe with Certain Materials? 7
8
Doe next argues that the SEC violated his rights under the Due Process 9
Clause of the Fifth Amendment by failing to provide him with materials that 10
would have enabled him to contest the CRSʹs PD more effectively. Specifically, 11
Doe argues that the SEC violated Rule 21F‐12(a) by relying on materials 12
submitted by Claimants 1 and 2 in determining Doeʹs whistleblower claim, and 13
then not producing those materials to Doe. Petʹr Doe Br. 35. We disagree. We 14
think Doeʹs argument is contrary to the plain meaning of the relevant 15
regulations. 16
Rule 240.21F‐10(e)(1)(i) requires the SEC to produce material requested by 17
a claimant only if the materials ʺformed the basis of the Claims Review Staffʹs 18
Preliminary Determinationʺ on the claimantʹs application. 17 C.F.R. § 240.21F‐ 19
10(e)(1)(i). Those ʺmaterialsʺ may be (1) ʺpublicly available materials from the 20

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
24
covered action or related action,ʺ (2) ʺthe whistleblowerʹs Form TCR . . . and 1
other related materials provided by the whistleblower to assist the Commission 2
with the investigation,ʺ (3) ʺthe whistleblowerʹs . . . award application [and 3
supporting submissions],ʺ and (4) ʺ[s]worn declarations (including attachments) 4
from the Commission staff regarding any matters relevant to the award 5
determination.ʺ Id. § 240.21F‐12(a). Crucially, claimants are ʺnot entitle[d] . . . to 6
obtain from the Commission any materials . . . other than those listedʺ in Rule 7
21F‐12(a). Id. § 21F‐12(b). 8
Claimant 1ʹs and 2ʹs submissions are not included within the materials that 9
Doe is entitled to review under Rule 21F‐12(a). The SEC therefore did not violate 10
that rule or by extension Doeʹs Due Process rights in refusing to produce them. 11
V. Did the SEC Act in an Arbitrary and Capricious Manner by Favoring 12
Claimant 2ʹs Submissions over Doeʹs? 13
14
Doeʹs final argument is that the SEC was ʺbiased against Doe in its 15
treatment of information that he provided versus similar information provided 16
by Claimant 2.ʺ Petʹr Doe Br. 38. He therefore challenges the SECʹs decision on 17
the basis that its treatment of his submission was arbitrary and capricious. 18
We conclude to the contrary. It was reasonable for the SEC to credit its 19
staffʹs informed determination that Doe had not provided a credible submission, 20

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
25
and that Claimant 2 had provided consistent, critical information that led to the 1
successful enforcement action against DB. 2
The CFIU staff explained that it had concluded, after interviewing Doe in 3
2010, that he ʺhad difficulty articulating credible and coherent information 4
concerning any potential violation of the federal securities laws.ʺ Muoio 5
Declaration at 1; JA 4059. Doe ʺbrought with him to the meeting a wet brown 6
paper bag containing what he claimed to be evidence,ʺ and his ʺfiles were 7
jumbled and disorganized. During the meeting he repeatedly referred to distress 8
over [a] personal situation, and [he] appeared to be under great duress.ʺ Id. And 9
when Doe was interviewed again in 2013, this time by the DB team, they found 10
that he was ʺvery difficult to follow, as he jumped from topic to topic.ʺ Addʹl 11
Friedman Declaration, at 13; JA 3833. 12
The SEC personnel decided that Claimant 2, by contrast, provided more 13
critical or helpful information in a far more digestible manner than Doe. The DB 14
team itself characterized Claimant 2ʹs submission as ʺdetailed and 15
comprehensiveʺ and concluded that it ʺfar surpassed the quality of the 16
information provided by [Doe].ʺ Addʹl Friedman Declaration, at 9; JA 3829. Doe 17
purports to perceive some pernicious bias, asserting that Claimant 2 also 18

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
26
provided ʺpublicly availableʺ information—an aspect of Doeʹs submission that 1
the SEC faulted him for—but the DB team explained that ʺClaimant 2ʹs expert 2
report was not based on publicly available information, but contained an inside 3
view of . . . the Montreal Accord.ʺ Id. at 11. The SEC therefore acted in a manner 4
that was reasonable, not arbitrary or capricious. 5
VI. Were Kilgour and Williams entitled to a whistleblower award for the 6
information that they submitted in their Form TCR? 7
8
Kilgour and Williams argue that they are entitled to a whistleblower 9
award on the basis of information they provided to the SEC in their joint Form 10
TCR submitted in August 2014. We disagree. 11
As discussed above, Kilgour and Williams would be entitled to an award 12
in return for that submission only if (1) they provided original information 13
submitted in their Form TCR, and (2) their submission significantly contributed 14
to the success of the action. See 17 C.F.R. §§ 240.21F‐3(a), 240.21F‐4(b)(1)(ii), 15
(b)(5), (c)(2). But by the time they submitted their Form TCR, all the information 16
contained therein was already known to the DB team, having been provided by 17
Kilgour and Williams earlier to support Claimant 2ʹs submissions. Accordingly, 18
their Form TCR submission did not significantly contribute to the success of the 19
DB action; Claimant 2ʹs submissions did. 20

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
27
We recognize that Rule 21F‐4, contains an ʺoriginal source exception,ʺ 1
which provides that 2
The Commission will consider you to be an original 3
source of the same information that we obtain from 4
another source if the information satisfies the definition 5
of original information and the other source obtained the 6
information from you or your representative. 7
8
17 C.F.R § 240.21F‐4(b)(5). Kilgour and Williams argue a that refusal to grant 9
them that exception renders the original source exception ʺmoot because it 10
would effectively disqualify all whistleblowers, including petitioners Kilgour 11
and Williams, from making [w]histleblower applications using original 12
information attributed to them under this rule, because, by definition, the SEC 13
was already aware of it.ʺ Petʹrs K&W Br. 28. We disagree: The SECʹs 14
interpretation of ʺinformation . . . that led toʺ in Rule 21F‐4(c)(2)—discussed 15
above—would not have the effect of nullifying the original‐source definition in 16
Rule 21F‐4(b)(5). 17
Rule 21F‐4(b)(7) advises a whistleblower that: 18
[i]f you provide information to the Congress, any other 19
authority of the Federal government, a state Attorney 20
General or securities regulatory authority, any self‐ 21
regulatory organization, or the Public Company 22
Accounting Oversight Board, or to an entityʹs internal 23
whistleblower, legal, or compliance procedures for 24

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Nos. 18‐1124, 18‐1127
Kilgour v. United States Securities and Exchange SEC
28
reporting allegations of possible violations of law, and 1
you, within 120 days, submit the same information to the 2
Commission pursuant to § 240.21F‐9 of this chapter, as 3
you must do in order for you to be eligible to be 4
considered for an award, then, for purposes of 5
evaluating your claim to an award under §§ 240.21F‐10 6
and 240.21F‐11 of this chapter, the Commission will 7
consider that you provided information as of the date of 8
your original disclosure, report or submission to one of 9
these other authorities or persons. 10
11
17 C.F.R. § 240.21F‐4(b)(7). In other words, in circumstances identified in the 12
Rule—such as when a person submits his or her tip to another federal agency— 13
the SEC will treat the information as though it had been submitted to the SEC 14
directly from that person at the same time that it was submitted to the other 15
agency. This rule thus preserves the original source exception, notwithstanding 16
the submission‐focused nature of Rule 21F‐4(c)(2), for certain specified situations. 17
This case does not present such a situation. 18
Conclusion 19
We have considered the petitionersʹ remaining arguments in support of 20
their petitions and conclude that they are without merit. For the foregoing 21
reasons, we DENY the petitions of Doe, Kilgour, and Williams to compel the SEC 22
to grant their applications for whistleblower awards in connection with the DB 23
matter. 24

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