What It’s Like to be a Wall Street Whistleblower

On June 21, 2021, Jordan Thomas was one of several whistleblower attorneys to comment in an in-depth Institutional Investor article by Leah McGrath Goodman entitled “What It’s Really Like to Be a Wall Street Whistleblower.”

The article centers on the story of Eugene Ross, a former Bear Stearns broker with celebrity clients including Lily Cates. In 2004, Miss Cates consulted Mr. Ross about missing statements from a hedge fund in which she invested run by her friend Alberto Vilar, a prominent figure well-known at the time for his investing acumen, wealth and philanthropy. However, it soon appeared to Mr. Ross that Mr. Vilar was stealing from their mutual client.

Mr. Ross assisted Miss Cates in investigating, including in a surprise meeting with Mr. Vilar, who reportedly had become evasive with them. Their suspicions were borne out, and Mr. Ross reported the problem to Bear Stearns and began voluntarily cooperating with prosecutors and the SEC. Mr. Vilar and a partner were convicted and served years in jail. Mr. Ross, rather than being celebrated or rewarded, was terminated by Bear Stearns, lost his house and went bankrupt.

Fortunately, since Mr. Ross’s experience, protection for whistleblowers arrived in the form of the SEC’s whistleblower program. Among other things, whistleblowers are eligible under this program for awards based on the quality and utility of their information and amounts of sanctions collected, by the SEC and/or in related actions. They are also protected from employer retaliation, chiefly through anonymity (“I don’t think [the SEC] has ever messed up” in protecting a whistleblower’s identity, one attorney opined).

Jordan highlighted the change in the fortunes of whistleblowers: “they live in a motel on the edge of town, eating cat food — it’s not like that anymore.” He also stressed that most whistleblowers are motivated by more than the money, even though some awards have reached “afford-an-island” levels.