Investors Get SEC Whistleblower Protections Too, Judge Says

Law360 (July 22, 2021, 5:00 PM EDT) -- A New York federal judge held Wednesday that the U.S. Securities and Exchange Commission's whistleblower protection rule extends to shareholders, keeping alive the agency's claim that a sports memorabilia company illegally muzzled investors.

U.S. District Judge Victor Marrero adopted a magistrate judge's May recommendation not to dismiss a whistleblower protection claim the SEC tacked onto its $6 million fraud suit against Collector's Coffee Inc. and its CEO Mykalai Kontilai, a fugitive on the FBI's most wanted list.

In a November 2019 amended complaint, the SEC alleged that in addition to defrauding investors, Collector's Coffee and Kontilai flouted Rule 21F-17 of the...

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