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The Social Science Research Network (SSRN) has posted a report studying the effects that DOJ and SEC whistleblowers have had on financial misrepresentation actions.*  (The “Study”.)  The Study finds a connection between whistleblower assistance and “larger monetary penalties for the targeted firms”.  It also finds that SEC whistleblower help increases the likelihood of the SEC imposing monetary sanctions on the wrongdoers.  The Study was conducted by professors at four different univ... read more

One of the first questions that a potential SEC whistleblower may ask an SEC whistleblower lawyer is whether he or she is eligible to win an SEC whistleblower award. Sometimes this question can be answered fairly easily. There are some occasions, though, when the potential whistleblower might be excluded from receiving an award under the SEC whistleblower program. For example, an individual employed by one of the government agencies listed in the SEC whistleblower statute would typically be i... read more

Do the Dodd-Frank Act’s anti-retaliation provisions protect whistleblowers who report securities frauds or violations to their employers, if they do not also report them to the SEC?  This question is of particular concern to an SEC whistleblower lawyer, who may be faced with a client who has been retaliated against or fired by his or her employer for blowing the whistle internally to the company. Since at least 2013, this may be the most often-litigated question arising under the SEC whist... read more

As a follow-up to my last article, on Wednesday the SEC announced that it has fined Barclays Capital more than $97 million for overcharging three sets of clients by almost $50 million.  The violations took place from September 2010 - December 2015. This was the second time in less than two weeks that the SEC has fined Barclays.  Just nine days earlier, the SEC fined Barclays over $12.7 million for RMBS supervisory failures. The recent action brings the total amount of fines that the SEC has ... read more

A preliminary question that many potential SEC whistleblowers ask is whether the SEC has jurisdiction to investigate the type of fraud or misconduct that they have uncovered.  A potential whistleblower will often raise this question in his or her first conversation with an SEC whistleblower lawyer. Among the types of cases that the SEC investigates are compliance and supervisory failures at public companies and financial advisory firms.  A recent case from earlier this week provides a good ex... read more

Over the past several months, many people have asked me what I think, as an SEC whistleblower lawyer, about the future of the SEC whistleblower program in light of the current Presidential administration’s calls to “repeal” the Dodd-Frank Act. This question has come up again following U.S. Representative Jeb Hensarling’s public presentation last week of a “discussion draft” of an updated version of his Financial CHOICE Act.  The new version, officially named the Financial CHOICE Ac... read more

Yesterday, four U.S. Senators introduced a bi-partisan bill to increase civil penalties under the Federal securities laws. The name of the bill is the Stronger Enforcement of Civil Penalties Act, otherwise known as the “SEC Penalties Act”.  It was introduced by Senator Jack Reed (D-RI), Senator Chuck Grassley (R-IA), Senator Patrick Leahy (D-VT), and Senator Heidi Heitkamp (D-ND). The two primary monetary remedies available to the U.S. Securities and Exchange Commission (“SEC”) are ... read more

Recently, two Committee Chairmen in the U.S. Senate sent a letter to the Acting Chairman of the Commodity Futures Trading Commission urging the CFTC to take stronger actions to protect whistleblowers.  That letter, signed by two ranking Republicans, may come as some relief for a potential CFTC or SEC whistleblower, or for a CFTC or SEC whistleblower lawyer, concerned over all of the recent calls to repeal the Dodd-Frank Act. Calls To Repeal The Dodd-Frank Act President Trump campaigned... read more

A question that a client may ask his or her SEC whistleblower law firm is whether he or she is allowed to turn over company documents to the SEC.  This can create a dilemma for an SEC whistleblower lawyer. One reason for this dilemma is that the traditional corporate law and employment law view has long been that corporate documents belong to the company.  Therefore, an employee can get into trouble for taking them without permission. However, in the SEC whistleblower context, the Dodd-Frank... read more

On Thursday, the SEC fined Citigroup Global Markets $18.3 million for overbilling investment advisory clients and losing client contracts.  This case may be interesting to a potential SEC whistleblower or SEC whistleblower lawyer not only because of the hefty fine, but also because of the type of case and how the SEC characterized it. As might be expected, the SEC referred to it in part as an “overbilling” case.  But it did not call the remainder an “accounting” or “internal ... read more

Over the past several months, the SEC has brought several high-profile cases against companies that required departing employees to waive their rights to SEC whistleblower awards.  Last week, the SEC brought two more such cases, this time against BlackRock and HomeStreet.  For a potential SEC whistleblower or an SEC whistleblower lawyer, this string of enforcement actions is important, because they demonstrate the SEC’s commitment to aggressively protect its whistleblowers and its SEC whistl... read more

Yesterday, the SEC issued an investor alert about “churning.”  This alert was issued alongside a churning case that the SEC also filed in federal court yesterday.  Yesterday’s news may be of interest to a potential SEC whistleblower or an SEC whistleblower lawyer, as it provides yet another example of the kinds of cases that the SEC brings. Relevance of the alert for an SEC whistleblower or SEC whistleblower lawyer In its alert, the SEC defines churning as occurring “[w]hen a broker ... read more

As I was posting my article last week, the SEC announced that it fined the Port Authority of New York and New Jersey for not disclosing certain risks about its construction projects to bond investors.  This follows another recent SEC case that involved the City of Miami, Florida.  These cases are worth noting for a potential SEC whistleblower or SEC whistleblower lawyer, because they show that the SEC is serious about bringing cases for municipal securities violations. The first municipal iss... read more

One question that is constantly on the mind of a potential SEC whistleblower or an SEC whistleblower lawyer is whether the SEC will be interested in their case.  While there is no way to guarantee anything, some insights can be gained by looking at the kinds of cases that the SEC has brought in the past. On category of cases that the SEC investigates are securities frauds involving public pension funds.  In this post, I will discuss a case that the SEC brought recently involving a public pens... read more

In my post last week, I mentioned that as an SEC whistleblower lawyer, prospective clients often ask me whether terms in their companies’ separation or confidentiality agreements preclude them from blowing the whistle to the SEC. After my last article was posted, later that afternoon the SEC came out with another case against a company that put terms into its separation agreements in order to prevent its employees from reporting to the SEC.  It was the fifth case of this kind that the SEC ha... read more

As an SEC whistleblower lawyer, prospective clients often ask me whether terms in their companies’ severance agreements or confidentiality agreements prevent them from reporting frauds to the Securities and Exchange Commission.  According to the SEC, the answer is “no”. The SEC has been vigorously pursuing companies that put clauses in agreements designed to chill employees from blowing the whistle.  Just yesterday, the SEC brought its fourth case in five months against a company for tr... read more

Questions Clients Often Ask An SEC Whistleblower Law Firm As an SEC whistleblower lawyer, I often hear questions like “How many whistleblower tips does the SEC get each year?” “How many tips get through to the investigation stage?” and other similar questions.  It is not uncommon for a client to ask one or more of these questions when interviewing a potential SEC whistleblower law firm. Because the SEC whistleblower program has not been around for decades, there is not a lot of hard d... read more

Jason Pickholz is a co-author of the two-volume book Securities Crimes, published by leading legal publisher Thomson Reuters.  In 2013, Jason added a new chapter to the book dedicated to the SEC whistleblower program.  Every year since then, he has updated and expanded the original chapter with knowledge and insights that he has gained over the past 6 years as an SEC whistleblower lawyer, and over two decades representing clients in cases with the SEC. Mr. Pickholz’s SEC whist... read more

Last week, as I was posting the final installment of my 3-part article about the recent Presidential election, the Chair of the Securities and Exchange Commission gave a speech in which she again praised the SEC whistleblower program.  If you are an SEC whistleblower or SEC whistleblower lawyer and missed last week’s article, you can read it here. On Friday, SEC Chair Mary Jo White gave a speech at New York University School of Law.  Perhaps anticipating that her audience would include futu... read more

Over the past ten days, several clients and more than one SEC whistleblower lawyer have asked me what I think the recent national Presidential election results portend for the future of the SEC whistleblower program.  In the first two Parts of this post, I have attempted to give legislative and historical context to this question.  In this concluding Part, I turn to the current environment and the election itself. As I stated in both prior Parts of this post, nothing herein should be construe... read more

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 a... read more

Several clients have called me during the past week with concerns about what, if anything, the U.S. Presidential election results mean for the future of the SEC whistleblower program.  If you are an SEC whistleblower, potential SEC whistleblower, or SEC whistleblower lawyer, you may have similar concerns. For this reason, I have decided to write a slightly different type of post this week to present some of my thoughts on this question.  Today’s post will consist of my own per... read more

On Thursday, the Securities and Exchange Commission (“SEC”) imposed sanctions on International Game Technology (“IGT”) for retaliating against and firing an employee who blew the whistle on alleged accounting and financial statement frauds at IGT.  This is the second time that the SEC has brought an action against a public company for retaliating against an SEC whistleblower.  In 2014, the SEC brought an action against a company for both violating the Investment Advisers Act of 1940 an... read more

Yesterday, the Securities and Exchange Commission (“SEC”) announced that it set several records during fiscal year 2016. According to the SEC’s press release, the SEC gave out $57 million in awards to SEC whistleblowers during FY2016.  Not only was this a record, but it was more than had been awarded to SEC whistleblowers “in all previous years combined.”  Less than two months ago, the SEC announced that it had exceeded $100 million in SEC whistleblower awards granted. The press re... read more

Yesterday, the SEC imposed sanctions on Anheuser-Busch InBev SA/NV (“AB”) for inserting terms into its severance agreements that inhibited or prevented departing employees from reporting securities law violations to the SEC.  The SEC’s Order follows on the heels of two other recent cases in which the SEC punished companies for requiring departing employees to waive their rights to receive SEC whistleblower awards. Background: FCPA Violations The Order against AB... read more