Location, Location, Location: The Geography of an SEC Whistleblower

Jordan Thomas - Tuesday, November 18, 2014
In the SEC’s report to Congress, just released today, the agency documented the tremendous success of its revolutionary investor protection initiative. As we peel back the layers of the report, we note some startling findings with respect to the origin of whistleblower submissions. First and foremost, the program’s international reach is inarguable. This year’s largest award — more than $30 million! — came from a foreign tipster. And, of all 14 awards issued by the SEC to date, four were awarded to whistleblowers outside the U.S. This year, the agency received tips from 60 different international jurisdictions, with the UK, India, Canada, China, and Australia chief among these. Within the U.S., submissions came from every state in the union. The busiest states for whistleblowers in FY2014? California, Florida, Texas, and New York. How this stacks up to 2013 submissions is particularly interesting: submissions from California jumped by 48%; Florida by 41%; Texas by 54%; and New York, which fell from 2nd to 4th place, actually recorded a 5% drop in submissions. To view the SEC report in its entirety, please see here.

Historic Year for Whistleblowers, Report Confirms

Jordan Thomas - Tuesday, November 18, 2014
The SEC Office of the Whistleblower has just released its report to Congress chronicling the program’s success over the last year. The data is extremely encouraging, serving as an apt reminder that a quiet revolution in law enforcement is underway, powered by whistleblowers who dare to speak out against misconduct. Highlights from this year’s report include 3,620 whistleblower tips - an increase of more than 20% in the number of tips in just two years. The SEC made 9 whistleblower awards in FY2014, the largest of which exceeded $30 million. The balance of the Investor Protection Fund at the close of the fiscal year was an astonishing $437 million! Tips came in from every state in the union and 60 countries, including a significant number of submissions from the UK, India, Canada and China. The report also highlighted the Agency’s new muscle, flexed in its case against Paradigm Capital (where I represented the whistleblower), in which the SEC used its new authority to bring anti-retaliation cases against entities seeking to undermine whistleblowers.

Video: Whistleblower Tour Takes Manhattan

Jordan Thomas - Thursday, November 13, 2014
If you missed the NYC stop on the Government Accountability Project’s Whistleblower Tour last month, you’re in luck. Baruch has shared a fantastic recording of the panel on which I was honored to speak alongside Enron Whistleblower Sherron Watkins, Jon Oberg, Louis Clark and Jennifer Pacella.

American Whistleblowers Live at Baruch from kokobaz on Vimeo.

Law360 Minority Powerbroker Series

Jordan Thomas - Thursday, November 06, 2014
This week, I was honored to participate in Law360’s Minority Powerbroker Series. As I formulated my answers to five pivotal questions at the crossroads of race and professional development, I had time to reflect on the many colleagues and friends along the way who have been so supportive of my individual efforts. This made for a very rewarding Q&A! Please feel free to see the full article here.

Top Lawmakers Urge SEC to Protect Whistleblowers

Jordan Thomas - Thursday, October 30, 2014
This week, eight leading Democrats on the House Oversight and Government Reform and House Financial Services Committees sent a letter to SEC Chair Mary Jo White calling on the Commission to ensure corporations do not enact measures meant to stymie whistleblowers. The letter pointed to a recent Washington Post article, which outlined numerous ways companies have restricted employees from reporting misconduct.

The letter echoes concerns that we, along with the Government Accountability Project, first raised in a July Op-Ed in the New York Times DealBook. Along with GAP and 250 other organizations, we have submitted a petition, urging the SEC to hold a series of hearings around the country to discuss the problem of workplace retaliation and explore new ways to increase reporting, internally and externally. It also asks the agency to create an advisory committee on whistleblower reporting and protection; to recommend program improvements and best practices; and engage in appropriate rule-making to clarify and strengthen whistleblower protections. This is a serious issue and we are glad Congress has taken notice of our efforts.

Please feel free to view the petition here - and, as always, don’t hesitate to reach out with any questions or concerns.

Whistleblowers on Tour

Jordan Thomas - Friday, October 24, 2014
This week, I was honored to participate in the NYC stop of the Government Accountability Project’s Whistleblower Tour, which seeks to educate the public about the important role whistleblowers play in promoting government and corporate accountability. Speaking on a panel with Enron Whistleblower Sherron Watkins, Jon Oberg, Louis Clark and Jennifer Pacella was a phenomenal experience, which I’ll dive into in a forthcoming post. My thanks to GAP for organizing this important event and to Baruch College for hosting. For more information in the meantime, here’s an excellent article in Corporate Counsel.

Gearing Up for Annual Report, White Touts Whistleblower Program’s Success

Jordan Thomas - Tuesday, October 21, 2014
As we await the Annual Report of the SEC Office of the Whistleblower—expected in mid-November—Mary Jo White categorically praised the program, citing its 'enormous success’ in generating information about significant securities violations. (See the FY 2013 Annual Report here.) In her address last week to the Ontario Securities Commission, which is considering the implementation of an incentive-based whistleblower program, White remarked that there was “no question” the US agency had achieved more with the program than it could have without it.

In FY 2014, the SEC awarded some $35 million to 9 whistleblowers, including the largest award to date, more than $30 million paid to a whistleblower living in a foreign country. Notably, that award represented less than the 30% maximum allowed under the program—because the whistleblower delayed coming forward to the SEC.

So while we share the agency’s enthusiasm, and salute a record-setting year, we are mindful that our work to educate whistleblowers continues. For more information on who can be a whistleblower and why timing matters in reports to the SEC, please feel free to see this video or to reach out to us directly.

By Jordan A. Thomas and Jennifer D. Larson

2014 Enforcement Division Report

Jordan Thomas - Monday, October 20, 2014
Last week, the SEC released key data relating to Enforcement Division activity in FY 2014.  Among the highlights, we note a 10% increase in enforcement actions over the prior year. Most importantly, monetary sanctions are significantly larger; a 22% increase in penalties an disgorgement as compared to FY 2013.  Whistleblowers continue to play a crucial role in the enforcement paradigm — with 9 whistleblowers receiving total awards of approximately $35 million in FY 2014. Notably, using its new authority to bring anti-retaliation enforcement actions, the SEC charged hedge fund advisory firm Paradigm Capital Management with engaging in prohibited principal transactions and then retaliating against the employee who reported the trading activity to the Commission, and charged the firm’s owner in connection with the principal transactions. This employee is a Labaton Sucharow client. For the complete results, see the SEC release.

Achievements, Challenges and Change: A Look at the Past, Present and Future of the SEC Whistleblower Program

Jordan Thomas - Thursday, August 07, 2014
Four years ago, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping financial reform effort since the Great Depression. One of Dodd-Frank’s key charges was the creation of a whistleblower program that offered anonymous reporting, employment protections and significant monetary incentives to eligible SEC whistleblowers.

Is the program working? Are whistleblowers strengthening corporate compliance programs? Will the program be a game-changer in securities enforcement?  What makes corporate whistleblowers successful?

We invite you to read our Year in Review, a report that examines the major developments related to the SEC Whistleblower Program over the past 12 months and how these developments are likely to impact the future of corporate whistleblowing and how responsible organizations do business.

The Best Way to Honor Whistleblowers on National Whistleblower Appreciation Day? Do More to Protect Them

Jordan Thomas - Wednesday, July 23, 2014
In recognition of National Whistleblower Appreciation Day, coming up on July 30, we were asked to contribute a guest post on the Government Accountability Project’s website, which can be found here. GAP is the nation’s leading non-profit, non-partisan whistleblower protection and advocacy organization, which helps expose wrongdoing to the public and actively promotes government and corporate accountability. Since its founding in 1977, GAP has represented over 5,000 whistleblowers in the court of law and in the court of public opinion, including hundreds of whistleblowers who have reported financial misconduct.

Now, we are partnering with GAP and a growing coalition, representing more than 250 organizations and nearly two million citizens, to urge the SEC to take action to protect SEC whistleblowers from retaliation and other attempts by employers to restrict their employees’ rights to participate in the SEC Whistleblower Program. We believe that this important effort will help protect and strengthen the SEC Whistleblower Program. For more information or to get involved, please click here.


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Website Editor &
SEC Whistleblower Advocate

Jordan A. Thomas jthomas@labaton.com

212-907-0836

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