Cerny v. U.S. Securities & Exchange Commission
Opinion of the Court
SUMMARY ORDER
Petitioners Charles M. Cerny and Cliff Buxbaum, proceeding pro se, seek review of a March 14, 2016 final order of the Securities and Exchange Commission (the “Commission”) denying as untimely their claims for whistleblower awards. We assume the parties’ familiarity with the underlying facts, procedural history, and issues on appeal.
After discovering a notice on the Commission’s website advising of the case’s resolution, a development that made them potentially eligible for whistleblower awards based on securities fraud judgments obtained by the Commission, petitioners filed claims with the Commission seeking such awards. The notice listed the deadline to file a claim as June 3,2012, and petitioners submitted separate claims in 2014.
We review the Commission’s whistle-blower award determinations “in accordance with section 706 of Title 5.” 15 U.S.C. § 78u-6(f). Accordingly, we will set aside an agency action only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or if it is “unsupported by substantial evidence.” 5 U.S.C. § 706(2)(A), (E). A whis-tleblower who wishes to apply for an award must submit an application within ninety days of the publication of a “Notice of Covered Action” on the Commission’s website, “or the claim will be barred.” 17 C.F.R. § 240.21F-l0(a). Nevertheless, “the Commission may, in its sole discretion, waive any of the[] procedures [described in § 240.21F-10] based upon a showing of extraordinary circumstances.” Id. § 240.21F-8(a).
Petitioners acknowledge that they failed to meet the deadline, but argue that the quality of the information they provided to the Commission and the Commis
Petitioners also argue that the untimeliness of their applications should have been excused because they never received actual notice from the Commission of their potential eligibility for a whistle-blower award. Under the relevant regulation, however, the Commission is not required to provide actual notice to potential claimants. It provides simply: “Whenever a Commission action results in monetary sanctions totaling more than $1,000,000, the Office of the Whistleblower will cause to be published on the Commission’s Web site a ‘Notice of Covered Action.’” 17 C.F.R. § 240.21F-10(a); see also Securities Whistleblower Incentives and Protections, 76 Fed. Reg. 34,300, 34,342-43 (June 13, 2011) (rejecting commenters’ request that the Office of the Whistleblower be “required to contact whistleblowers directly to inform them [of] a covered action”). Accordingly, the Commission did not abuse its discretion by declining to excuse the untimeliness of petitioners’ claims based on their failure to receive actual notice from the Commission. To the extent petitioners challenge the notice rule itself as arbitrary or capricious, adopting such a rule is within the scope of the Commission’s discretion, 15 U.S.C. § 78u-6(j), and therefore lies beyond the scope of our current review.
We have considered petitioners’ remaining arguments and conclude they are without merit. Accordingly, we DENY the petition for review.
. Buxbaum filed his March 30, 2014 claim on behalf of himself and three other individuals, including Cerny. Cerny, who had not signed Buxbaum's claim, subsequently submitted his own claim on July 14, 2014.
Reference
- Full Case Name
- Charles M. CERNY, Cliff Buxbaum v. U.S. SECURITIES AND EXCHANGE COMMISSION
- Status
- Published