John Doe v. Securities and Exchange Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 13, 2023 Decided June 21, 2024
Reissued August 16, 2024
No. 23-1044
JOHN DOE,
PETITIONER
v.
SECURITIES AND EXCHANGE COMMISSION,
RESPONDENT
On Petition for Review of an Order
of the Securities and Exchange Commission
Thomas Cummins, pro hac vice, argued the cause for
petitioner. On the briefs was Max Maccoby.
William K. Shirey, Counsel to the Solicitor, U.S. Securities
and Exchange Commission, argued the cause for respondent.
With him on the brief were Megan Barbero, General Counsel,
and Michael A. Conley, Solicitor.
Before: HENDERSON, WILKINS, and PAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.

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WILKINS, Circuit Judge: Suspecting his client of
committing a crime, an attorney blows the whistle, intending to
subject his client to a possible investigation and enforcement
action by the Securities and Exchange Commission (the
“Commission”). Can such an attorney then collect a
whistleblower award from the Commission on the grounds that
the disclosure of his client’s information was reasonably
necessary to serve his client’s interests? We agree with the
Commission that the answer to that question is no.
Under the Commission’s regulations implementing its
whistleblower award program, an attorney may not receive a
whistleblower award for disclosing information obtained
during the representation of a client unless the attorney’s
disclosure was permitted by the applicable state bar rules or the
Commission’s attorney conduct regulations. See 17 C.F.R.
§ 240.21F-4(b)(4)(ii). Petitioner John Doe, an attorney, filed a
whistleblower tip with the Commission, disclosing information
obtained while representing a client. Doe then filed an
application for a whistleblower award. Doe argued that his tip
was permitted by an applicable state bar rule that authorizes the
disclosure of “confidential information” to the extent that the
attorney “reasonably believes necessary” to “serve the client’s
interest.” Doe also stated repeatedly before the Commission,
however, that he had suspected his client of wrongdoing and
had intended for his whistleblower tip to result in his client
being investigated by the Commission.
The Commission denied Doe’s application, reasoning that
Doe’s disclosure of his client’s information was not permitted
by any applicable state bar rule. We affirm the Commission’s
sound determination that Doe’s disclosure of his client’s
information was not reasonably necessary to serve his client’s

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interest because the record shows that, when he filed his tip,
Doe suspected his client of wrongdoing and intended to subject
his own client to an investigation by the Commission.
I.
A.
The Commission’s whistleblower award program was
created when Congress passed the Dodd-Frank Act, which
amended the Securities Exchange Act of 1934 (the “Exchange
Act”) to create a range of new incentives and protections for
whistleblowers. See Pub. L. No. 111-203, § 922, 124 Stat.
1376 (2010) (codified at 15 U.S.C. § 78u-6); see also Doe v.
SEC, 28 F.4th 1306, 1311–12 (D.C. Cir. 2022). The Exchange
Act permits the Commission to provide monetary awards to
“whistleblowers who voluntarily provided original information
to the Commission that led to the successful enforcement” of a
“covered judicial or administrative action” that resulted “in
monetary sanctions exceeding $1,000,000.” 15 U.S.C. § 78u-
6(a)(1), (b)(1). “[O]riginal information” is information that, as
relevant here, is “derived from the independent knowledge or
analysis of a whistleblower.” Id. § 78u-6(a)(3)(A).
In regulations implementing the whistleblower award
program, the Commission has limited the circumstances under
which an attorney may receive an award for reporting
information that was gathered during the attorney’s
representation of a client. See id. § 78u-6(j) (authorizing the
Commission to “issue such rules and regulations as may be
necessary or appropriate to implement” the whistleblower
award program); see also 17 C.F.R. § 240.21F-4. Those
regulations instruct whistleblowers that the Commission “will
not consider information to be derived from [a

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whistleblower’s] independent knowledge or independent
analysis”—that is, not “original information” within the
meaning of the Exchange Act, see 15 U.S.C. § 78u-
6(a)(3)(A)—if the whistleblower
obtained the information in connection with the
legal representation of a client on whose behalf
[the whistleblower] . . . [is] providing services,
and [the whistleblower] seek[s] to use the
information to make a whistleblower
submission for [the whistleblower’s] own
benefit, unless disclosure would otherwise be
permitted by [the Commission’s attorney
conduct regulations], the applicable state
attorney conduct rules, or otherwise.
17 C.F.R. § 240.21F-4(b)(4)(ii) (“Exchange Act Rule 21F-
4(b)(4)(ii)”).
B.
In 2018, the Commission brought an enforcement action
against two individuals—Individual 1 and Individual 2—and
corporate entities owned and controlled by those individuals
(collectively, “Defendants”), alleging that they had engaged in
securities fraud. The Commission explained that the
Defendants had offered and sold the securities of a corporate
entity. In doing so, the Defendants had misrepresented to
investors in the securities offering that their money would be
used to fund a particular project (the “Project”). Instead of
spending investors’ funds on the Project, however, Individual
1 and Individual 2 misappropriated a large portion of investors’
funds for their personal use.

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The Commission’s preceding investigation was prompted,
in part, by a whistleblower tip filed by Petitioner John Doe.1
As the Defendants’ securities fraud scheme was unfolding, Doe
was employed as in-house counsel at a company (the
“Company”). The Company was owned and controlled by
Individual 1 and provided assistance in connection with the
Defendants’ securities offering. Doe worked on legal and
administrative matters that were necessitated by the securities
offering.
During the course of his employment at the Company, Doe
came across information that indicated that Individual 2 was
misappropriating money invested in the securities offering.
Individual 2 did not own, control, or play any formal role at the
Company.
Doe filed a whistleblower tip with the Commission. In his
tip, Doe explained that Individual 2 was misappropriating
investors’ funds for his personal use and that, as a result, the
Project that the securities offering was supposed to fund would
never be completed. Doe explained that the Commission could
help “protect investors” by ensuring that the Project was
completed or, at a minimum, that investors received their
money back. J.A. 52.
Although Doe’s whistleblower tip did not mention the
Company or Individual 1, both were investigated by the
Commission as a result of Doe’s tip and ultimately subject to
enforcement actions. The Commission’s investigation and
enforcement actions resulted in judgments against Individual
1, Individual 2, the Company, and other corporate entities,
1 In addition to Doe’s tip, the Commission also received a referral
from another government agency.

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along with sanctions collectively totaling tens of millions of
dollars.
C.
Following the conclusion of enforcement proceedings, the
Commission published a Notice of Covered Action inviting
potential claimants to file an application for a whistleblower
award. Doe timely filed an application. In his application, Doe
stated that his tip had been intended not only to show Individual
2’s “culpability” but also “to launch a wider investigation into
the entire project.” J.A. 43.
The Commission issued a preliminary determination
recommending that Doe’s application be denied on the grounds
that Doe had not submitted “original information.” Citing
Exchange Act Rule 21F-4(b)(4)(ii), the Commission explained
that because Doe had obtained the information in his tip during
his legal representation of his client, the Company, Doe could
not receive a whistleblower award unless his disclosure was
permitted by the Commission’s attorney conduct regulations or
by the “applicable state attorney conduct rules.” 17 C.F.R.
§ 240.21F-4(b)(4)(ii). Doe’s disclosure, the Commission
concluded, was not permitted by the applicable state attorney
conduct rules: The Florida Rules of Professional Conduct
applied based on the location of the conduct at issue, and no
Florida Rule of Professional Conduct authorized Doe’s
disclosure to the Commission.
Doe timely filed a request for reconsideration, primarily
contending that two Florida Rules of Professional Conduct in
fact permitted his disclosure. First, Doe pointed to Florida Rule
of Professional Conduct 4-1.6(b) (“Florida Rule 4-1.6(b)”),
which requires a lawyer to “reveal confidential information to

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the extent the lawyer reasonably believes necessary
to . . . prevent a client from committing a crime.” Fla. R. Prof’l
Conduct 4-1.6(b)(1). Doe explained that he had had
“concerns” about the conduct of his client—the Company—
and that his whistleblower tip was intended, in part, “to prevent
[his] client, [the Company,] from committing a crime.” J.A.
76–77, 80. Second, Doe pointed to Florida Rule of
Professional Conduct 4-1.6(c)(1) (“Florida Rule 4-1.6(c)(1)”),
which provides that a lawyer “may reveal confidential
information to the extent the lawyer reasonably believes
necessary to . . . serve the client’s interest unless it is
information the client specifically requires not to be disclosed.”
Fla. R. Prof’l Conduct 4-1.6(c)(1). Doe explained that he
believed his disclosure would serve his client’s interest by
“preventing further misappropriation by [Individual 2],
possibly recovering funds that had been misappropriated, and
helping lead to the successful completion of [the Project].”
J.A. 81. In a sworn declaration, Doe reiterated that the purpose
of his whistleblower tip “was to prevent a crime being
committed by . . . [his] client,” and to prompt the Commission
to investigate the entire securities offering, including the
Company. J.A. 84.
In a 2023 order, the Commission formally denied Doe’s
whistleblower award application, again concluding that Doe
had not provided “original information” under Exchange Act
Rule 21F-4(b)(4)(ii) because no authority authorized Doe’s
disclosure of his client’s information. As to Florida Rule 4-
1.6(b), the Commission reasoned that the record demonstrated
that Doe had had, at most, “suspicion or speculation” that the
Company was implicated in criminal activity, not that Doe
believed that his disclosure was necessary to prevent the
Company from committing a crime. J.A. 96. The Commission
also rejected Doe’s argument that his disclosure was permitted

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by Florida Rule 4-1.6(c)(1). The Commission acknowledged
Doe’s contention that his disclosure could prevent further
misappropriation by Individual 2, lead to the Project being
completed, or lead to misappropriated funds being returned to
investors. But, the Commission explained, those possible
benefits were the interests of “investors” in the securities
offering, not “the interests of [Doe’s] client.” J.A. 97. And in
any event, the Commission emphasized, Doe “does not
demonstrate how exposing [his] client to an SEC investigation
and/or enforcement action based on suspicions would be in
[his] client’s interest.” Id.
II.
Doe petitions for review of the Commission’s denial of his
whistleblower award application. We have jurisdiction over
Doe’s petition under 15 U.S.C. § 78u-6(f).
Determinations regarding whether to make a
whistleblower award “shall be in the discretion of the
Commission.” Id. We review the Commission’s determination
“in accordance with section 706” of the Administrative
Procedure Act. Id. Thus, we will set aside the Commission’s
decision if it is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law,” or “unsupported by
substantial evidence.” 5 U.S.C. § 706(2)(A), (E); see also 15
U.S.C. § 78y(a)(4) (“The findings of the Commission as to the
facts, if supported by substantial evidence, are conclusive.”).
Doe contends that the Commission’s decision to deny his
application under Exchange Act Rule 21F-4(b)(4)(ii) was
arbitrary, capricious, and contrary to the evidence before the
agency. As we have explained, under the Commission’s
regulations, an attorney may not receive a whistleblower award

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from the Commission unless his disclosure was authorized by
the “applicable state attorney conduct rules.” 17 C.F.R.
§ 240.21F-4(b)(4)(ii). Doe maintains that his disclosure to the
Commission of information obtained during his representation
of his client, the Company, was authorized by Florida Rule 4-
1.6(c)(1). That rule, as mentioned, states that a lawyer “may
reveal confidential information to the extent the lawyer
reasonably believes necessary” to “serve the client’s interest.”
Fla. R. Prof’l Conduct 4-1.6(c)(1). Doe argues that the
Commission’s decision that Doe’s disclosure was not
reasonably necessary to serve his client’s interests
misconstrues the evidence in the record.2
We disagree. We hold that substantial evidence supports
the Commission’s finding that Doe did not reasonably believe
that disclosing the Company’s information to the Commission
was “necessary” to “serve [his] client’s interest.” Id. The
record demonstrates that at the time he filed the tip, Doe
believed that the Company was implicated in the securities
fraud scheme. In reporting on the suspected wrongdoing, then,
Doe was reporting on his own client. Common sense therefore
dictates that Doe could not have reasonably believed that he
was acting in his client’s best interest. Indeed, Doe’s own
statements illustrate as much. Doe noted in his application for
reconsideration, for example, that while he did not yet have
“smoking gun” proof of misconduct by his client at the time
that he filed his whistleblower tip, he had “suspicions” that his
2 Doe and the Commission agree on appeal that the Florida Rules of
Professional Conduct apply based on the location of the conduct at
issue. The parties also agree that because Doe was acting as in-house
counsel for the Company, Doe’s client was the Company itself. Cf.
Nat’l Sec. Couns. v. CIA, 811 F.3d 22, 33 (D.C. Cir. 2016) (“[T]here
is an attorney-client relationship between in-house counsel and a
corporation.”).

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client was implicated in the securities fraud scheme. J.A. 78.
And in a sworn declaration, Doe stated, “[t]he purpose of the
disclosure in my whistleblower submission was to prevent a
crime being committed by . . . my client.” J.A. 84. Doe
elaborated that his tip was intended to enable the Commission
to investigate the “entire money trail,” including not only
Individual 2 but also Doe’s own client. J.A. 85.
Doe’s arguments to the contrary are unavailing. Perhaps
sensing that he would face an uphill battle in arguing that
intentionally subjecting one’s client to an investigation is in
that client’s best interest, Doe primarily challenges the
Commission’s finding that Doe suspected that his client was
involved in wrongdoing when he submitted his whistleblower
tip. Doe emphasizes that the preamble to the Florida Rules of
Professional Conduct provides that an “assessment of a
lawyer’s conduct will be made on the basis of the facts and
circumstances as they existed at the time of the conduct in
question in recognition of the fact that a lawyer often has to act
upon uncertain or incomplete evidence of the situation.” Fla.
R. of Prof’l Conduct pmbl. (emphasis added). In Doe’s view,
to evaluate the “facts and circumstances as they existed at the
time” that he filed his whistleblower tip, the Commission
should have considered only the contemporaneous evidence—
the content of Doe’s tip—not any of Doe’s subsequent
statements before the agency. Those subsequent statements to
the Commission, Doe explains, were made with the benefit of
“hindsight”; they merely reflect how Doe’s mindset changed as
the Commission’s investigation revealed that his employer was
implicated in wrongdoing. Pet. Br. 26. Accordingly, Doe
contends, the statements should be ignored as irrelevant. Doe
argues that his tip, read in isolation, supports the notion that he
thought that his client was a victim—not a perpetrator—of a
crime. Doe accordingly reasonably believed that his tip was in

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his client’s best interest because he thought the tip could protect
his client from others’ wrongdoing.
Doe’s argument fails on its own terms. As he recognizes,
the preamble to the Florida Rules suggests that Doe’s conduct
should be assessed based on the facts and circumstances at the
time Doe submitted his tip. See Fla. R. of Prof’l Conduct pmbl.
And here, Doe submitted material to the Commission,
including a sworn declaration, that spoke directly to those
facts—namely, what Doe believed at the time he submitted his
tip. Doe informed the Commission, for example, that his
“goal” in submitting this tip was “to prevent [his] client . . .
from committing a crime.” J.A. 76–77. Doe elaborated that he
intended for the Commission to investigate the entire securities
offering, including his client; he explained, “I fully expected
my tip to result in such a widely encompassing investigation”
and “I intended for that to occur.” J.A. 77. Doe provides this
Court no reason to think that the Commission was required to
ignore that evidence of his then-existing mental state. Further,
Doe’s counsel stated at oral argument that he had no precedent
to support his contention that the Commission could consider
only the content of his whistleblower tip when assessing his
application. Oral Arg. Tr. at 28. The Commission acted
reasonably when it considered Doe’s own statements in
arriving at the conclusion that Doe suspected his client was a
perpetrator of the wrongdoing he suspected was occurring.
Next, Doe contends that the Commission erred in rejecting
Doe’s argument that he believed that his whistleblower tip
would serve his client’s interest by “preventing further
misappropriation by [Individual 2], possibly recovering funds
that had been misappropriated, and helping lead to the
successful completion of [the Project].” J.A. 81. We think this
argument is effectively resolved by our conclusion that

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substantial evidence supports the notion that Doe suspected
that the Company was engaged in wrongdoing when he
submitted his tip. Doe may be correct that preventing the
misappropriation of funds or enabling the Project to be
completed could have benefitted the Company, but whether the
disclosure could conceivably benefit the Company is not the
correct question. Florida Rule 4-1.6(c)(1) asks not whether a
disclosure could benefit the client in some way, but rather
whether the lawyer “reasonably believes” that a disclosure is
“necessary” to serve the client’s interest. Here, with the
possible marginal benefits to which Doe points on one side of
the ledger, and the foreseeable investigation and enforcement
action by the Commission on the other, we do not think Doe
could reasonably have believed that disclosing the information
to the Commission was “necessary” to serve his client’s
interests.
Finally, we note that in a footnote in his opening brief, Doe
stated that he had argued before the Commission that his
disclosure was authorized by several other state attorney
conduct rules and the Commission’s attorney conduct
regulations; Doe informed this Court that those arguments were
“incorporated by reference as if set forth fully herein.” Pet. Br.
13 n.2. This Court, however, does not “consider cursory
arguments made only in a footnote.” Hutchins v. District of
Columbia, 188 F.3d 531, 539 n.3 (D.C. Cir. 1999); see also
Covad Commc’ns Co. v. FCC, 450 F.3d 528, 546 (D.C. Cir.
2006) (attempting to “incorporate by reference” other
arguments is “insufficient to raise the issue”). Thus, this Court
need not address Doe’s alternative argument—articulated both
in his reply brief and at oral argument—that his disclosure was
authorized by Florida Rule 4-1.6(b), which requires disclosure
where reasonably necessary to prevent a lawyer’s client from
committing a crime.

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At bottom, having repeatedly stated to the Commission
that he believed at the time he submitted his tip that his client
was implicated in wrongdoing, Doe cannot now unring the bell.
We hold that the Commission’s determination—based on
Doe’s own statements—that Doe could not reasonably have
believed that his disclosure was necessary to serve his client’s
interests was supported by substantial evidence and was not
arbitrary or capricious.
For these reasons, Doe’s petition for review is denied.
So ordered.

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