Award Winning Attorneys
SEC Whistleblower Program
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A $2.5 million award announced by the SEC last week didn’t include the name of the agency where the person worked, the company involved in the misconduct or the nature of the conduct involved, but lawyers representing tipsters and companies in whistleblower cases drew lessons from a footnote attached to the order. The footnote delineated who, among government employees, is eligible to apply for whistleblower rewards if they bring information that leads to an enforcement action: Anyone who works for a local, state or federal agency, other than those at regulatory agencies or a law-enforcement organization.
Jordan A. Thomas, a former SEC official who led the development of the agency’s whistleblower program and now chairs the Firm’s Whistleblower Representation Practice, said the program was designed to ensure that virtually everyone aware of wrongdoing would be able to report it. Though certain individuals, such as regulators or compliance professionals, “have higher hurdles” before they can become eligible, he said “it isn’t surprising” that the SEC, when interpreting the program’s scope, “would take a broad view of eligible government employees.”
“The SEC doesn’t want another Madoff scandal, where knowledgeable individuals remain silent. It would be particularly unfortunate if a person remained silent if they worked for another government agency,” he said.