The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted by Congress in 2010, is the biggest revamp of U.S. financial regulation to have come about since the Great Depression in the 1930’s. Among other things, the Dodd-Frank Act created a new whistleblower program which provides important employment protections and financial motivation for individuals who report possible violations of federal securities laws to the Securities and Exchange Commission (SEC).
In response, Labaton Sucharow became the first law firm in the country to engineer a practice that exclusively focused on protecting and advocating for SEC whistleblowers. The SEC Whistleblower lawyers were hired to build on the firm’s market-leading securities litigation platform. This practice gains power with a world-class in-house team made up of investigators, financial analysts, and forensic accountants. All of whom have federal and state law enforcement experience which procures a unique group to represent the whistleblowers.
The practice is led by Jordan A. Thomas, whose experience comes from being a former Assistant Director and Assistant Chief Litigation Counsel in the Division of Enforcement at the SEC. During his time working for the SEC, Jordan was an important leader in developing the Whistleblower Program. He also drafted the proposed legislation and final implementing rules.
The SEC uses this program by paying eligible whistleblowers between 10 and 30% of the financial sanctions collected due to a successful SEC enforcement action, or actions, resulting in an excess of $1 million. Additional awards are also available based on financial sanctions in related actions brought about by other regulatory and law enforcement organizations.
What makes the Dodd-Frank act so effective is that it prohibits any kind of retaliation by employers against the whistleblowers who have reported to the SEC. Whistleblowers may also report any possible securities violations anonymously if they are represented by an attorney.
The whistleblower program has also received some criticism. Though they may be well known for multi-million dollar pay outs, it has also been noted that a backlog of claims has been allowed to build up. In order to receive an award, the whistleblower must first file a notice of claim, which then must be reviewed by SEC staff and approved by the commission itself, resulting in a long wait period. Jordan A. Thomas, however, says he is not concerned about this wait time, it is in the interest of the commission to do the right thing for the client.