Our SEC whistleblower clients are diverse, coming from all walks of life, a wide range of industries and every corner of the globe.
Our clients tend to be senior executives that have a lot to lose or other knowledgeable individuals who are able to substantiate significant possible securities violations. While the majority of our clients elect to remain anonymous, we can share certain data points to provide greater insight into our practice.
Our clients’ tips resulted in landmark SEC enforcement actions against JP Morgan and Merrill Lynch — combined settlements of more than $720 million.
We are selective. Our past success allows us to be patient. Our work is deeply personal. We seek clients who are willing to roll up their sleeves and work hard to ensure the success of their cases and we studiously avoid clients who don’t play well with others. Ultimately, we trust our instincts. When a case is truly special, we feel it. It changes and excites us. Working with courageous SEC whistleblowers is the most rewarding thing that we can imagine doing with our lives.
Officers and directors are uniquely positioned to detect corporate wrongdoing within their organizations and have a responsibility to report possible securities violations internally and externally, if internal legal and compliance systems fail. Traditionally, corporate officers and directors have assumed that they were required to resolve corporate misconduct internally, but this is not always true. Sometimes external whistleblowing can be consistent with, and required by, their fiduciary duties of loyalty, care, good faith, and oversight.
Consistent with this, officers and directors are eligible to participate in the SEC Whistleblower Program if:
1) reporting is necessary to prevent the company from engaging in conduct that is likely to cause substantial injury to the financial interest or property of the company;
2) the company is engaged in conduct that will impede an investigation of the misconduct; or
3) 120 have elapsed since the problem was reported internally, and the company has failed to address it appropriately.
Due to our unique legal expertise and experience in this area, having represented the first corporate officer to receive an SEC whistleblower award, and the many technical requirements, before filing a whistleblower tip, officers and directors should consult the legal team at SEC Whistleblower Advocates or read our feature in ProMarket, "Monetary Awards Are Not the Only Reason Why Whistleblowers Report Corporate Malpractice."
SEC Insider Tip: Sophisticated officers and directors should protect investors by carefully documenting the specific events when management ignored warnings about possible securities law violations and bypassed internal rules.
While only individuals can participate, the scope of the SEC Whistleblower Program allows whistleblowers to report possible securities law violations in any industry. SEC Whistleblower Advocates has represented or advised several high-profile whistleblowers in the life science and technology industries, including the two doctors who successfully reported wrongdoing at Cassava Sciences and Frances Haugen, the Facebook whistleblower. We help members of such firms navigate the inevitable scrutiny of the public and the Securities and Exchange Commission after they discover fraudulent search data or clinical trial results.
SEC Insider Tip: Sophisticated life sciences and technology whistleblowers provide clear data that shows how their companies failed to follow SEC regulations regarding public disclosures.
The wealthy, powerful, and largest firms have massive armies of high-priced lawyers to fight off scrutiny and defend their interests. SEC whistleblowers deserve sophisticated legal counsel with the necessary inside knowledge, experience, and connections to level the playing field. Unlike other whistleblower practices, the legal team at SEC Whistleblower Advocates has been successfully prosecuting high-profile SEC cases for decades. Based on our history as SEC prosecutors and regulators, who helped draft the applicable statute and program rules, we understand the written and unwritten rules necessary to be a successful SEC whistleblower and the internal procedures the agency follows to issue large awards. As a result, our clients have launched many of the Commission's highest-profile cases and secured precedent-setting results. To date, our clients have helped the government secure more than $2 billion in monetary sanctions. For more information about our concierge legal practice, request a confidential legal consultation or check the recent profile in The New Yorker, "Jordan Thomas's Army of Whistle-Blowers."
SEC Insider Tip: To avoid personal and professional regrets, sophisticated whistleblowers hire attorneys with prior SEC experience because they have insider insights into the Commission's national enforcement program and whistleblower program, which improve the odds of an award.
Changes, such as adjustments, overrides, revisions, restatements, or journal entries, in a company's accounting records are a classic financial fraud red flag because accounting systems are supposed to produce stable, traceable, and controlled financial information. This is especially true when these changes occur near the end of reporting periods. Auditors are often the first to see matters of this nature, but reporting them requires a careful approach to avoid personal liability and to maintain eligibility to participate in the SEC Whistleblower Program.
Auditors are eligible to participate in the SEC Whistleblower Program if:
1) reporting is necessary to prevent the company from engaging in conduct that is likely to cause substantial injury to the financial interest or property of the company;
2) the company is engaged in conduct that will impede an investigation of the misconduct; or
3) 120 have elapsed since the problem was reported internally, and the company has failed to address it appropriately.
Due to the high stakes and technical eligibility requirements, before filing a whistleblower tip, auditors are encouraged to consult with the legal team at SEC Whistleblower Advocates and read our article in CFO Magazine, "An 'Impossible Position' for Corporate Fraud Gatekeepers."
SEC Insider Tip: Sophisticated auditor whistleblowers document their efforts to resolve the problem internally and only report to the Commission when the company's legal and compliance systems have failed.
To get the Commission's attention, whistleblowers need to file high-quality and detailed whistleblower submissions that educate the Staff on the possible securities violations, provide or identify available proof, and convince them that the underlying misconduct is serious enough to prioritize over other potential investigations. While there are several benefits to filing quickly, they should be balanced against the risk of making a bad first impression. Sadly, many whistleblowers don't invest sufficient time in preparing their legitimate whistleblower tips. As a result, the Staff only gives them a cursory review before designating them NFA (No Further Action) in the Commission's Tips, Complaints, and Referral System. With decades of experience as SEC prosecutors, we know what the Staff needs to be successful and how to get it for them. Our whistleblower submissions often include a structured evidentiary narrative and timeline, map every allegation to specific proof, review the available business data, provide corroborating documents, and list of other potentially knowledgeable individuals and sources of evidence, address likely defenses, and acknowledge what we don't know.
SEC Insider Tip: Sophisticated whistleblowers ensure that their initial whistleblower submission is complete, reliable, and actionable because they know that the SEC receives tens of thousands of tips every year, and only a small fraction of those will be investigated.
Modern securities fraud often involves complex data sets that require advanced technology to unravel. This is especially true for market manipulation schemes which occur at a massive scale, across fragmented markets, and often through high-speed algorithmic trading activity that humans cannot monitor manually. With the assistance of our clients, experts, and specialized tools, SEC Whistleblower Advocates is able to document trading behavior, analyze abnormal trading patterns and related financial statements, and connect trading participants across markets.
SEC Insider Tip: Sophisticated market manipulation whistleblowers preserve any digital evidence or communications, in their original format and unaltered, that show how the manipulation was executed, coordinated, and concealed.
Due to the high-risk and high stakes, few decisions are more important for SEC whistleblowers than who they hire to represent them. Sophisticated whistleblowers, particularly senior executives on Wall Street and in Corporate America, primarily focus on five things:
1) experience investigating and prosecuting securities cases at the SEC or experience representing high-profile whistleblowers before the Commission, but preferably both;
2) subject matter knowledge of the relevant industry, securities laws and the SEC Whistleblower Program and its rules, ideally from inside the Commission;
3) connections within the Commission, to advance your tip, solve case problems, and advocate for the highest possible whistleblower award;
4) a verifiable track record of success in the area, including the number and size of whistleblower awards the firm has secured for their clients;
5) a good potential attorney-client fit, since whistleblowers and their counsel will work closely together for years, there should be a good vibe between the two; and
6) a high level of trust is a top priority, because a whistleblower's professional and personal future may depend on their whistleblower attorney
SEC Insider Tip: After conducting an interview, sophisticated whistleblowers ask themselves, am I willing to put my professional and personal future in this attorney's hands? If the answer isn't an unqualified yes, they keep looking.
