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):
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2506418

* * *

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.