GOP, Dems, and Independents All Agree On One Thing: The
SEC’s Whistleblower Program

Senators, Congressmen, and SEC officials all have high praise
for the
SEC’s whistleblower program.

The SEC’s Whistleblower Program Has Proven To Be A Unifying
Force.

As we head into the 2018 mid-term elections, one refrain seems
to be dominating the public headlines:  the country is
fractured.  Fractured over issues stemming from athletes
kneeling during the national anthem; fractured over issues
surrounding the #MeToo movement; fractured over judicial
confirmation hearings; fractured over the state of the
economy, or international trade wars, or the environment, or
health care, or any number of other things.

Repeatedly, votes in the U.S. Senate and House have been
divided straight down party lines.  Some commentators have
posited that the era of legislation through bipartisan
negotiation and hard-fought compromise is a thing of the past,
having been replaced by a red-blue color war defined by strict
adherence to dogma laid down by each party’s respective
leadership.

Yet amid all of this turmoil, one subject has emerged as a
beacon of hope.  Support for the SEC’s whistleblower program
has been a unifying force for members of both of the major
parties and independents.  They include Senators, Members of
Congress, SEC Chairs, SEC Commissioners, and other SEC
officials who have all issued public statements strongly
supporting SEC whistleblowers and
the SEC’s whistleblower program.

Two years ago, I posted a 3-part article predicting the
Future Of The SEC Whistleblower Program
following the 2016 Presidential election.  In
part 2
of that article, I pointed out that government whistleblower
programs have been around since 1863 and have survived through
28 different Presidents, both
Republican and
Democrat.  I reflected
that federal whistleblower programs have historically enjoyed
bipartisan support after being enacted.  In
part 3
of the article, I expressed my belief that Congress would
continue to support the
SEC whistleblower program.

Recent official pronouncements have borne out this prediction.

The U.S. Capitol

Several U.S. Senators And Congressmen Strongly Support The
SEC’s Whistleblower Program.

Just last month,
U.S. Senator Charles Grassley
(R-IA) wrote a letter
strongly supporting the SEC’s whistleblower program.  It was
addressed to the Chair of the United States Securities and
Exchange Commission.  Senator Grassley is the Chairman of the
United States Senate Committee on the Judiciary.  His letter
was written on the letterhead of the U.S. Senate Committee on
the Judiciary.

In Senator Grassley’s letter, among other things he defended
the granting of large
SEC whistleblower awards
to meritorious whistleblowers.  The Senator emphasized that
“Congress made a very clear policy choice to prioritize
amply rewarding a whistleblower above
other priorities” (his italics).  He also called the
protection of a whistleblower’s identity “a linchpin” of the
SEC’s whistleblower program.

Last year, Senator Grassley (R) introduced the
SEC Penalties Act.  That bill sought to increase the amount of civil penalties
available to the SEC under the federal securities laws.
 Democratic Senators Jack Reed (D-RI), Patrick Leahy (D-VT), and Heidi Heitkamp (D-ND) joined Senator Grassley in introducing that bill.

Approximately one month after the bipartisan SEC Penalties Act
was introduced, U.S. Representative Jeb Hensarling (R-TX), the Chairman of the U.S. House of Representatives
Financial Services Committee, released a discussion draft of
his
Financial CHOICE Act 2.0, which preserved the SEC whistleblower program almost
entirely in its original form.  (The only change that
Representative Hensarling proposed in the draft was to make
culpable whistleblowers who had engaged in the securities
frauds themselves ineligible to receive
SEC whistleblower rewards.)

Also last year, Senator Grassley (R), along with U.S. Senator Pat Roberts (R-KS), the Chairman of the Senate Agriculture Committee, sent
a letter to the CFTC calling for
increased whistleblower protections.  The CFTC’s whistleblower program was created by the
Dodd-Frank Act, the same Act that created the SEC
whistleblower program.

Although that letter was not signed by any Democrats, in 2014
eight Members of the U.S. House of Representatives
sent a letter to the then-Chair of the SEC calling for
increased SEC whistleblower protections.  That letter, written
on the letterhead of the U.S. House of Representatives
Committee on Financial Services, was signed by Representatives
Maxine Waters (D-CA),
Elijah Cummings (D-MD),
Gwen Moore (D-WI), Jackie
Speier (D-CA), Keith
Ellison (D-MN), Tammy
Duckworth (D-IL, now a
Senator), Stephen Lynch (D-MA), and Matt Cartwright (D-PA).

The SEC’s Home Office, Washington, D.C.

Both SEC Chairs Have Uniformly Praised The SEC’s Whistleblower
Program.

Since the SEC’s whistleblower program was created in 2010,
there have been two different Chairs of the SEC.  The current
SEC Chair is Jay Clayton.  Mr. Clayton is an
Independent who was
nominated by a
Republican President
(President Trump).

Earlier this year,
Mr. Clayton issued a public statement
in which he called the SEC’s whistleblower program a
“groundbreaking program” that “is a critical component” in the
SEC’s enforcement arsenal.  According to Mr. Clayton, SEC
whistleblowers have “contributed significantly to our ability
to detect wrongdoing and better protect investors and the
marketplace, particularly where fraud is well-hidden or
difficult to detect.”

Mr. Clayton’s predecessor as SEC Chair was Mary Jo White, a
Democrat who was nominated
by a Democratic President
(President Obama).

In 2016,
Ms. White testified
before the U.S. Senate Committee on Banking, Housing and Urban
Affairs that SEC whistleblowers have had “a transformative
impact on our enforcement program”.  The
SEC’s Director of Enforcement
at the time echoed Ms. White’s testimony during a speech he
gave later in the year.  During November 2016,
Ms. White gave a speech
in which she stated that SEC whistleblowers “have become key
sources of very significant cases” and asserted that “The SEC
intends to stay on the whistleblower beat to ensure protection
of whistleblowers …”

SEC Commissioners From Both Parties Laud The SEC’s
Whistleblower Program.

A few months ago, all three of the then-active SEC
Commissioners released public statements commending the SEC’s
whistleblower program.  Those Commissioners were Kara Stein
(D), Hester Peirce (R), and Robert Jackson, Jr. (D).  (The fourth Commissioner, Michael Piwowar, had already
announced that he would be stepping down.  The Senate had not
yet confirmed his replacement, Elad Roisman.)

Commissioner Stein (D) called the SEC’s
whistleblower program“a resounding success” and “good
government”.  She added that the program “has more than paid
for itself.  There are not many government programs that can
make that claim”.  According to Ms. Stein, the SEC has
received more than 22,000 whistleblower tips, resulting in
over $1.4 billion in financial remedies “the majority
of which has gone back to harmed investors.”

Commissioner Peirce (R) asserted that “The
SEC’s whistleblower program is a critical part of our
enforcement program”.  She also recognized that “The most
important part of our Whistleblower Program, of course, is the
whistleblowers themselves, who bring to our attention
securities law violations that otherwise might not come to
light for years or even forever”.

Commissioner Jackson (D) explained that
whistleblowers are “crucial” to the SEC, and that “experts of
all stripes have said that this program — which rewards those
who make the difficult decision to come forward to help us
expose fraud — is among our Staff’s most successful
endeavors”.

* * *

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.