{"id":2912,"date":"2021-01-16T14:23:33","date_gmt":"2021-01-16T19:23:33","guid":{"rendered":"https:\/\/navesinkinternational.com\/?p=2912"},"modified":"2023-12-20T02:53:23","modified_gmt":"2023-12-20T07:53:23","slug":"secs-former-whistleblowing-chief-sues-the-sec-for-changes-to-the-whistleblowing-program","status":"publish","type":"post","link":"https:\/\/navesinkinternational.com\/2021\/01\/16\/secs-former-whistleblowing-chief-sues-the-sec-for-changes-to-the-whistleblowing-program\/","title":{"rendered":"SEC&#8217;s former whistleblowing chief sues the SEC for changes to the whistleblowing program"},"content":{"rendered":"<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-2927 alignright size-medium\" src=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/whistle-300x200.jpg\" alt=\"Whistle\" width=\"300\" height=\"200\" srcset=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/whistle-300x200.jpg 300w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/whistle-480x320.jpg 480w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/whistle.jpg 640w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>There are several <span style=\"text-decoration: underline;\"><strong>whistleblowing programs in the United States<\/strong><\/span>, which all encourage and protect insiders to report fraud, waste and crime. The <a title=\"SEC WB program\" href=\"https:\/\/www.sec.gov\/whistleblower\/frequently-asked-questions\" target=\"_blank\" rel=\"noopener noreferrer\">SEC&#8217;s whistleblower program<\/a> is probably the most famous, as it has brought numerous and sometimes very large compensations to whistleblowers.<\/p>\n<ul>\n<li>The SEC&#8217;s program was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, replacing older laws from Sarbanes-Oxley. The initial protection program dates to the Whistleblower Protection Act of 1989.<\/li>\n<li>In essence, an individual is <a title=\"WB protection\" href=\"https:\/\/en.wikipedia.org\/wiki\/Whistleblower_protection_in_the_United_States\" target=\"_blank\" rel=\"noopener noreferrer\">protected against retaliation<\/a> from his employer for disclosing evidence of violations of <span style=\"text-decoration: underline;\"><strong>laws, rules, gross mismanagement\/waste of funds, abuse of authority, or substantial danger to public health or safety<\/strong><\/span>. That includes ponzis, theft, insider trading, manipulations, bribery, false statements&#8230;. the list is long.<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>You can report on an anonymous basis<\/strong><\/span>, meaning that only your attorney and very select\/senior individuals at the SEC will ever know your identity. This is valuable, because whistleblowers are often met with shattered reputations, broken careers, unemployment and financial difficulties if they go public, or even follow their firms&#8217; internal procedures. <a href=\"https:\/\/www.cbsnews.com\/news\/whistleblower-wells-fargo-fraud-could-have-been-stopped\/\" target=\"_blank\" rel=\"noopener\">Wells Fargo<\/a>\u00a0was known to systematically punish employees reporting abuse.<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>A whistleblower is also entitled to compensation<\/strong><\/span> of at least 10% and up to 30% of all the collections, fines and disgorgements obtained, thanks to his\/her &#8220;voluntary&#8221;, &#8220;original&#8221; information leading to a &#8220;successfull&#8221; action. The percentage essentially depends on how guilty of the crime the whistleblower is. He\/she cannot be the &#8220;initator&#8221; or &#8220;main sponsor&#8221; of the crime for instance.\u00a0If the recollection is less than $5m, the award should be 30%. There is a minimum recollection amount for such an award to take place (&gt;$1 m).\u00a0The individual or individuals do not need to be employees of the firm in question.<\/li>\n<li>Many reported complaints are without merit (&#8220;My neighbor drives a car he can&#8217;t afford&#8221;), but <a href=\"https:\/\/www.cnn.com\/2020\/10\/23\/business\/sec-record-whistleblower-award\/index.html\" target=\"_blank\" rel=\"noopener noreferrer\">the program is nevertheless very successful<\/a> in bringing corporations and fraudsters to justice.\u00a0 There are many famous cases, like <a href=\"https:\/\/en.wikipedia.org\/wiki\/Enron_scandal\" target=\"_blank\" rel=\"noopener noreferrer\">Enron<\/a>, and awards reach\u00a0<a title=\"Large SEC awards\" href=\"https:\/\/www.sec.gov\/news\/press-release\/2018-44\" target=\"_blank\" rel=\"noopener noreferrer\">dozens of millions<\/a> (the largest is $114m so far). The numbers of cases and awards keep growing year after year. The process is becoming a very efficient crime deterrent.<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>Other regulators also have whistleblowing programs<\/strong><\/span>: the <a href=\"https:\/\/www.whistleblower.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">CFTC<\/a>, the <a title=\"IRS WB program\" href=\"https:\/\/www.irs.gov\/compliance\/whistleblower-informant-award\" target=\"_blank\" rel=\"noopener noreferrer\">IRS<\/a>, the <a title=\"OSHA\" href=\"https:\/\/www.whistleblowers.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">OSHA<\/a>, etc, and you can sue in the name of the government (<a title=\"Wikipedia quitam\" href=\"https:\/\/en.wikipedia.org\/wiki\/Qui_tam#United_States\" target=\"_blank\" rel=\"noopener noreferrer\">qui tam<\/a>)&#8230;. Not all programs are as recognized or as efficient as the SEC&#8217;s; some would say it may be on purpose &#8211; the organizations may be criticized for not finding the cases in the first place. Also, there is solid lobby pressure to defang such programs.<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>If you see something abnormal in your firm<\/strong><\/span>, the main pieces of advice are:\n<ol>\n<li><em>Keep your job<\/em>. Your employment is valuable to both you\/your family and your case. Staying at your firm will not impact your award.<\/li>\n<li><em>Talk to an attorney<\/em>. Don&#8217;t wait too long; there are time limitations.<\/li>\n<li><em>Be patient<\/em>. Cases can take 3-7 years, probably longer than standard litigations. Your anonymity WILL be preserved all along.<\/li>\n<\/ol>\n<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>There are many law firms who can help you in this process, and associations<\/strong><\/span> (like the <a title=\"National Whistleblower center\" href=\"https:\/\/www.whistleblowers.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">national whisteblower center<\/a>) who can guide you in the process.\u00a0Navesink can recommend you to attorneys if needed.<\/li>\n<li>Law firms typically take these cases on contingency. A good attorney will attract the attention of the regulator, who is often bombarded with irrelevant requests. It is important to well select your attorney.<\/li>\n<\/ul>\n<p>Now, why is <a title=\"LinkedIn Jordan Thomas\" href=\"https:\/\/www.linkedin.com\/in\/jordan-a-thomas\/\" target=\"_blank\" rel=\"noopener noreferrer\">Jordan Thomas<\/a>, the former manager of the SEC&#8217;s whistleblowing program, suing the SEC?<\/p>\n<ol>\n<li>The SEC is amending the rules to <span style=\"text-decoration: underline;\"><strong>gain discretion in the award amount<\/strong><\/span>; the award is a big motivation for insiders to risk their career.<\/li>\n<li>The SEC is taking some of the &#8216;related actions&#8217; <span style=\"text-decoration: underline;\"><strong>off the pool used to calculate the awards<\/strong><\/span>.<\/li>\n<\/ol>\n<p>Essentially, the SEC is trying to reduce the awards. This will not help the program and its efficiency. FYI, Jordan Thomas is the head of Labaton Sucharow&#8217;s whistleblower program; he represents many whistleblowers.<\/p>\n<p>&nbsp;<\/p>\n<p>Credits to <a title=\"LinkedIn - Mengqui Sun\" href=\"https:\/\/www.linkedin.com\/in\/mengqi-sun\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mengqui Sun<\/a> at\u00a0<a title=\"WSJ\" href=\"https:\/\/www.wsj.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">The Wall Street Journal<\/a><\/p>\n<p><iframe style=\"background: white;\" src=\"https:\/\/www.wsj.com\/articles\/whistleblower-lawyer-sues-the-sec-over-bounty-program-rule-changes-11610586245\" width=\"100%\" height=\"650\"><\/iframe><\/p>\n<p>Credits to <a title=\"LinkedIn Lydia DePillis\" href=\"https:\/\/www.linkedin.com\/in\/lydia-depillis-4283971b\/\" target=\"_blank\" rel=\"noopener noreferrer\">Lydia DePillis<\/a> at <a title=\"Website ProPublica\" href=\"https:\/\/www.propublica.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">ProPublica<\/a> (outside <a title=\"ProPublica article\" href=\"https:\/\/www.propublica.org\/article\/the-sec-undermined-a-powerful-weapon-against-white-collar-crime\" target=\"_blank\" rel=\"noopener noreferrer\">link<\/a>):<\/p>\n<p><a title=\"The SEC Undermined a Powerful Weapon Against White-Collar Crime\" href=\"https:\/\/www.propublica.org\/article\/the-sec-undermined-a-powerful-weapon-against-white-collar-crime\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"wp-image-2924 aligncenter size-full\" src=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/ProPublica-The-SEC-undermined-a-powerful-weapon-against-white-colla-crime.jpg\" alt=\"ProPublica article - The SEC undermined a powerful weapon against white-collar crime\" width=\"797\" height=\"1009\" srcset=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/ProPublica-The-SEC-undermined-a-powerful-weapon-against-white-colla-crime.jpg 797w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/ProPublica-The-SEC-undermined-a-powerful-weapon-against-white-colla-crime-237x300.jpg 237w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/ProPublica-The-SEC-undermined-a-powerful-weapon-against-white-colla-crime-768x972.jpg 768w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/01\/ProPublica-The-SEC-undermined-a-powerful-weapon-against-white-colla-crime-480x608.jpg 480w\" sizes=\"(max-width: 797px) 100vw, 797px\" \/><\/a><\/p>\n<p>Additional information on the SEC&#8217;s program is available <a title=\"The SEC&#039;s whistleblowing program.\" href=\"https:\/\/www.sec.gov\/whistleblower\/frequently-asked-questions\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jordan A. Thomas, the former whistleblower program manager at the SEC, as well as a leading plaintiff attorney, is suing the SEC for changes to the program.<br \/>\nThis article explains what the SEC whistleblowing program is, why it is so successful, and why you should consider it if you see fraud or crime.<\/p>\n","protected":false},"author":1,"featured_media":2927,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12,11,13],"tags":[58,46,43],"acf":[],"_links":{"self":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/2912"}],"collection":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/comments?post=2912"}],"version-history":[{"count":1,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/2912\/revisions"}],"predecessor-version":[{"id":13072,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/2912\/revisions\/13072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/media\/2927"}],"wp:attachment":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/media?parent=2912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/categories?post=2912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/tags?post=2912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}