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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.

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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  Those programs have not been repealed.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.

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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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