A Conversation with Jordan Thomas: The Origins of the SEC Whistleblower Program

How to avoid the next financial crisis? How to detect the next fraud and deter the next fraudster? These questions plagued regulators, law enforcement, legislators and the public at large following the collapse of the global economy in 2008.

One idea that would prove to be prescient and, in its execution, extraordinarily successful, was the SEC whistleblower program.

In the wake of the global financial crisis, our country debated how to break the cycle of corporate scandal that had plagued the markets. Our financial watchdogs landed on two fundamental truths: The investor protection status quo wasn’t working; and law enforcement couldn’t effectively and efficiently police the marketplace without help. From this realization, the SEC whistleblower program was born.

The program offers eligible whistleblowers significant employment protections, monetary rewards, and the ability to report possible securities violations anonymously. And those monetary rewards can be quite substantial.

I was privileged to serve as one of the principal architects of the SEC Whistleblower program, which included assessing the program’s viability, lobbying for the program with the Commission and Congress, and drafting the proposed legislation and implementing rules. Since leaving the Commission, my practice is exclusively focused on representing SEC whistleblowers.

So I’ve seen the program both as an SEC insider and an SEC whistleblower advocate. I’m proud to report that each year the number and quality of tips have grown domestically and internationally. In fact, many of the Commission’s most significant cases have been the result of courageous SEC whistleblowers. Our whistleblower clients alone have been responsible for the SEC collecting more than $1 billion in monetary sanctions. Today, investors and the markets are far better off because of the SEC whistleblower program.