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Study Finds DOJ and SEC Whistleblower Help Leads to $20+ Billion More in Judgments

The Social Science Research Network (SSRN) has released the results of a recent study that investigated the effect that DOJ and SEC whistleblowers had on financial misrepresentation actions over a 35-year period, from 1978-2012.*

Notably, the Study found that the assistance of DOJ or SEC whistleblowers results in significantly higher penalties:  “In total, we estimate whistleblowers enabled regulators to successfully obtain additional judgments of $20.75 to $21.27 billion more than would have been obtained without their assistance.”  (Study, pages 4, 40.)

The Study also found that the involvement of DOJ and SEC whistleblowers “is associated with larger monetary penalties” against both companies and individuals.  According to their results, DOJ and SEC whistleblowers increased the average penalties against companies by 171%, and against individuals by 215%.  (Study, page 26.)

Furthermore, the Study found that when DOJ or SEC whistleblower complaints were filed, the likelihood that those agencies would bring enforcement actions was almost five times greater (4.78 times greater) than when there were no whistleblower complaints.  (Study, page 30.)

The authors of the Study believe that their findings suggest that DOJ and SEC whistleblowers “are a valuable source of information for regulators in the investigation and prosecution of firms and their managers.”  (Study, pages 5, 40.)

For anyone who is considering whether to report a fraud to the SEC through the SEC whistleblower award program, the results of the Study are significant.

First, the results suggest that if someone does become an SEC whistleblower, there is a greater chance that the SEC will bring an enforcement action against the wrongdoers and bring a halt to the fraud.  This might save more innocent victims from being hurt by the fraud, stop those who have already been victimized from being hurt even more, and in some cases might even prevent anyone from being harmed at all.

Second, the results indicate that the SEC has a better chance to collect more in disgorgement and penalties from the wrongdoers when it has help from an SEC whistleblower.  This may be meaningful to a potential SEC whistleblower, because under the SEC whistleblower reward program, if the SEC brings a successful enforcement action based on the information that a whistleblower provided, and if the SEC collects more than $1 million, the SEC must give the whistleblower(s) an SEC whistleblower award of 10% - 30% of the amount that the SEC collects, assuming all other requirements are met.

For more information about the SEC whistleblower award program, please click here.

If you would like to speak with an SEC whistleblower lawyer, you can contact Jason Pickholz at The Pickholz Law Offices LLC by calling 347-746-1222.

Note:  The on-line report explaining the Study was updated in 2017.  For a discussion of the updated version, please see my August 23, 2017 post by clicking here.


*Call, Andrew C. and Martin, Gerald S. and Sharp, Nathan Y. and Wilde, Jaron H., “The Impact of Whistleblowers on Financial Misrepresentation Enforcement Actions” (October 6, 2014).  Available at Social Science Research Network (SSRN):

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About the Pickholz Law Offices LLC

The Pickholz Law Offices LLC is a law firm that focuses on representing clients involved with investigations conducted by the U.S. Securities and Exchange Commission, FINRA, and other securities regulators.

The Pickholz Law Offices has represented employees, officers, and others in SEC whistleblower cases involving financial institutions and public companies listed in the Fortune Top 10, Top 20, Top 50, Top 100, Top 500, and the Forbes Global 2000. We were the first law firm ever to win an SEC whistleblower award for a client on appeal to the full Commission in Washington. Inside Counsel magazine named this achievement one of the five key events of the SEC whistleblower program. Examples of the Firm’s SEC whistleblower cases are available here.

In addition to representing SEC whistleblowers, since 1995 the Firm’s founder, Jason R. Pickholz, has also represented many clients in securities enforcement investigations conducted by the SEC, FINRA, the U.S. Department of Justice and US Attorney’s Offices, State authorities, and more. Examples of some of the many securities enforcement cases that Mr. Pickholz has been involved with are available here.

You can see what actual clients have had to say about The Pickholz Law Offices by going to the Client Reviews page on our website or by clicking here.

How to Contact the Pickholz Law Offices LLC

If you would like to speak with a securities lawyer or SEC whistleblower attorney, please feel free to call Jason R. Pickholz at 347-746-1222.

The Pickholz Law Offices remains open and will be fully operational through teleworking while we all grapple with this terrible pandemic. We hope that all of our clients, colleagues, friends, and their families remain safe and healthy. Our thoughts and prayers go out to everyone who has been affected by COVID-19.

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The Pickholz Law Offices represents U.S. and international clients in securities and white collar cases. The Firm has helped whistleblowers report frauds to the SEC, CFTC, and IRS, and has defended clients in investigations by the SEC, CFTC, DOJ, FINRA, and other financial and securities enforcement regulators.

The Firm’s founder, Jason Pickholz, is the author of the two-volume book Securities Crimes, has appeared on tv and radio, and has taught continuing legal education courses. A former BigLaw partner, he has been representing clients in financial and securities fraud cases since 1995. In recognition of his many achievements, Mr. Pickholz was elected by his legal peers to be a Fellow of The New York Bar Foundation, an honor limited to just 1% of all attorneys in the New York State Bar Association.

Mr. Pickholz has been counsel in many high-profile cases. He was the first attorney ever to win an SEC whistleblower award on appeal to the Commission, which Inside Counsel magazine called one of the five key events in the history of the SEC whistleblower program. On the defense side, Mr. Pickholz has defended clients in the SEC’s COVID-19 investigations, the CFTC’s cryptocurrency cases, and a former US Senator, among others.

If you want to speak with a CFTC, IRS, or SEC whistleblower lawyer, or with a white collar defense lawyer, you can call the Firm at 347-746-1222.

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