Holder's Whistleblower Proposal Omits Key to SEC's Success

Law360
September 17, 2014

Jordan A. Thomas suggests offering anonymity to whistleblowers as part of the Financial Institutions Reform, Recovery and Enforcement Act

U.S. Attorney General Eric Holder's proposal Wednesday to dramatically increase the size of monetary awards Wall Street tipsters can receive under the Financial Institutions Reform, Recovery and Enforcement Act may bring in more leads, but some experts say an amped-up rewards program should also take a cue from the U.S. Securities and Exchange Commission, which offers anonymity to those who come forward.

Jordan Thomas, chair of the whistleblower representation practice at Labaton Sucharow LLP, said he has counseled Wall Street clients whose concern for their reputation is greater than their appetite for cash.

"There are many senior Wall Street executives whom we consult with, and after doing due diligence on their cases, we come to the conclusion that yes, there is a case, but they conclude that the risk of retaliation and being blacklisted from the industry is too great a price," he said.

The SEC's ability to protect the identity of whistleblowers has "proven to be a very powerful thing," according to Thomas, who said he has seen senior executives bring tips specifically to the SEC in order to remain anonymous, without seeking an award.