The Future of the SEC Whistleblower Program: Post-Election
Concerns of SEC Whistleblowers and SEC Whistleblower Lawyers,
Part 2

In this 3-part post, I am addressing the question of what the
results of our recent Presidential election might mean for the
future of the whistleblower programs, particularly the SEC
whistleblower program.  If you are an SEC whistleblower or SEC
whistleblower lawyer, you may have been asking yourself this
question lately.

As I stated at the beginning of Part 1, these are my own
opinions based on over two decades of experience, including
the last six years since the Dodd-Frank Act was passed as an
SEC whistleblower lawyer.  Nothing herein should be construed
as legal advice.  Nor should anything herein be considered as
a substitute for consulting with your own SEC whistleblower
lawyer.

*     *     *

In addition to what I wrote in Part 1, another thing to keep
in mind is that while the SEC’s whistleblower program may be
the best-known whistleblower program right now, it is neither
the first nor the only whistleblower award program that the
country has.  During the Civil War, there was a significant
problem with suppliers defrauding the government and the
army.  In response, Congress passed the False Claims Act
(“FCA”) in 1863.  Speaking generally, the FCA rewards people
for blowing the whistle on frauds against the federal
government.  The FCA was amended and strengthened several
times.  Another program is the Internal Revenue Service
(“IRS”) whistleblower program, which has been around for over
100 years.  In 2006, the IRS’s program was amended to improve
its efficiency.  Since 1863, those whistleblower programs have
survived through 28 different Presidents, both
Republican and
Democrat.  Those programs
have not been repealed.  If anything they have been reaffirmed
or even enhanced.

Some SEC whistleblowers and SEC whistleblower lawyers may
nevertheless be concerned that the current calls to “get rid
of Dodd-Frank” seem to be emanating most vocally from certain
Republican politicians, including President-elect Donald
Trump.  They are especially concerned because, in the recent
national election, the Republican Party also maintained a
majority in both the U.S. Senate and the U.S. House of
Representatives.

To address this particular concern, a bit more history may
prove enlightening.  The FCA was enacted under President
Abraham Lincoln, who started as a Whig and later became a
Republican.  Amendments
and improvements to the FCA have been made under both a
Republican President
(President Regan) and a
Democratic President
(President Obama).  The improvements to the IRS whistleblower
program were enacted under President Bush, a
Republican.  If history is
any guide, while the current fight over the Dodd-Frank Act may
seem to be drawn along party lines, once enacted, federal
whistleblower programs have historically enjoyed bi-partisan
support.

More recently, on October 27, 2014, eight members of the U.S.
House of Representatives’ Committee on Financial Services
sent a letter
to the Chair of the SEC, urging the SEC to take greater
measures to protect SEC whistleblowers.  While the eight
signatories were
Democrats, the letter was
written on the Committee’s letterhead listing Jeb Hensarling
as Committee Chairman.  Although Chairman Hensarling, a
Republican, did not sign
that letter, this summer he proposed his own financial reform
act, called the
Financial CHOICE Act.  In Chairman Hensarling’s remarks, while he did not address
the SEC whistleblower program specifically, he did claim that
his proposed CHOICE Act will “impose the toughest penalties in
history for financial fraud, self-dealing and deception.”

Whistleblower programs have also been embraced at the State
level. Approximately half of the States, if not more, have
their own versions of a False Claims Act.  Since the SEC
whistleblower program came into effect in 2010, some States,
such as New York, have entertained the idea of passing their
own financial whistleblower programs.  A few foreign nations
or agencies have also implemented their own financial
whistleblower programs, such as the Ontario (Canada)
Securities Commission’s whistleblower program (2016), which
offers a financial award, and the United Kingdom’s Financial
Conduct Authority’s whistleblower rules (2015), which offer
whistleblowers protections but no financial awards.  While
these State and foreign programs may have little direct
relevance to the SEC whistleblower program, they demonstrate
that the current mood is shifting toward recognizing,
protecting, and rewarding whistleblowers, not moving away from
them.

These reasons support my present belief, stated in Part 1,
that the incoming Presidential administration is unlikely to
dismantle the SEC whistleblower program. I will be concluding
my thoughts in Part 3 of this post.

For Part 3 of this Post, click
here. ->

<- For Part 1 of this Post, click
here.

* * *

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
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