Partner Jordan A. Thomas, a leading SEC Whistleblower Lawyer, was quoted in Compliance Week following two recent instances of whistleblowers turning to the media to put pressure on regulatory authorities. This week, Sandra Kuba, a former Disney employee, brought her findings of accounting misconduct to the media after numerous attempts to get the attention of the Department of Labor and the SEC. In another recent example, Henry Markopolos, a career whistleblower, recently published a 175-page report alleging accounting fraud by General Electric.
With experts believing that the increasing number of tips, over 26,000 from 2011 to 2018, has become overwhelming due to the slow pace of investigating and processing of cases, Jordan sees potential pitfalls with whistleblowers going public with their allegations. “As a general rule of thumb, public disclosure of allegations ahead of authoritative investigation undermines the law enforcement and prosecutorial processes, in part because it eliminates the opportunity for surprise. When you put out a 175-page report, there aren’t many surprises.” He continues saying, "a public disclosure of allegations also often elicits a public denial, as it did in the case of GE. Then it becomes much harder for the SEC and the target entity to later settle on the same grounds. Even if they can reach a settlement, the process is far more protracted.”
Still, he understands the frustration. “If the SEC’s claim processing doesn’t improve, more whistleblowers may choose to follow in Mr. Markopolos’ footsteps."
Read the full report here.