SEC Tipsters Lose Appeal of Award in Texas Insurance Fraud (1)

The Securities and Exchange Commission wasn’t required to pay awards to two men who blew the whistle on an insurance fraud based on recoveries in a bankruptcy case, a federal appeals court ruled.

John McPherson, a forensic accountant, and investor John Barr challenged the SEC’s interpretation of the whistleblower statute after the agency awarded them a fraction of what they felt entitled to after exposing what they’ve called the largest fraud in Texas history.

The US Court of Appeals for the Fifth Circuit rejected arguments that the SEC’s decision would damage the whistleblower program.

“These contentions go to policy concerns ...