Kyle Bass Wins Reversal of SEC Move to Deny Whistleblower Award

The SEC acknowledged that activist investor Kyle Bass should have been paid as a whistleblower two years ago, apparently the first time it has overturned a decision to deny an award in response to a federal court challenge.

The Securities and Exchange Commission’s new ruling, issued without any notice to the federal court hearing Bass’s appeal, awarded the Texas billionaire $400,000 for his help in exposing fraud at a Dallas land developer. Bass said he deserved $2.5 million. A second informant on the same case was given more than $2 million.

The commission initially ruled Bass wasn’t entitled to an award because he was acting on behalf of his company, Hayman Capital Management, and not as an individual tipster. In response to Bass’s appeal to the US Court of Appeals for the Fifth Circuit, the SEC took the unusual step of asking that the case be returned to it, writing that it may have misinterpreted an “ambiguous” email from Bass’s attorney.

The SEC now agrees that Bass acted as an individual tipster.

Source: Kyle Bass Wins Reversal of SEC Move to Deny Whistleblower Award