Former Enron Executive: SEC Whistleblower Program Is a Game Changer

Jordan Thomas was tapped for his perspective in a July 7, 2021 Wall Street Journal article by Mengqi Sun. The article is a profile on Sherron Watkins, the former Enron executive who blew the whistle on the now-defunct energy giant for its use of complicated off-balance-sheet vehicles to conceal hundreds of millions of dollars in losses. It discusses her current life and experiences since she became perhaps the most well-known whistleblower in the history of corporate America.

Of course, Watkins’ whistleblowing occurred prior to the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the resulting SEC whistleblower program, which changed the game for whistleblowers by allowing them to report anonymously. In addition, the program protects against employer retaliation, and insures against any industry blacklisting in the form of sanctions-based awards. As observed by Watkins, this structure has also led to many whistleblowers now being represented by attorneys, which furthers their protection and causes.

Because none of that was in place for Watkins, her identity and efforts to expose Enron’s wrongdoing became public knowledge, and her career suffered. Since that time, in her words, Watkins has been “grossly underemployed.” She noted, concerning opportunities she has pursued, “always just a door kind of slammed . . . .” If the SEC’s program had been available, however, Watkins would have “remained anonymous, stayed employed, [and] Enron would still be alive.”

Jordan was blunt in his assessment of what happened to Watkins and other whistleblowers prior to Dodd-Frank: “I think it reflected badly on our country and on corporate America,” he said. But he added that it wasn’t surprising companies would act this way, because of potential skeletons in their own closets that they’d rather stay there. And Jordan agreed that anonymity under the SEC’s program ultimately provides whistleblowers with their best defense in such a scenario.