Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

Today, the U.S. Court of Appeals for the Third Circuit issued a major precedential decision in the case of Wiest v. Tyco Electronics Corp., establishing the standards for protecting corporate whistleblowers under the Sarbanes-Oxley Act. In a 2-1 split ruling, the Court held that corporate whistleblowers who have a "reasonable belief" that securities laws are being violated are protected under the Sarbanes-Oxley Act (SOX).  The Court rejected arguments raised by Tyco and the Chamber of Commerce that the SOX whistleblower law only protected employees whose disclosures "definitively and specifically" related to a "violation of a statute."

The whistleblower, Mr. Jeffrey A. Wiest, had worked at Tyco for 31 years, and was fired after rejecting expense payments that "failed to satisfy accounting standards."  

The National Whistleblower Center filed an amicus brief in the case supporting Mr. Wiest, and Stephen M. Kohn, a partner in the law firm of Kohn, Kohn and Colapinto, LLP, co-argued the case before the Appeals Court on behalf of the NWC.  He joined Mr. Wiest's counsel, Richard Angino, in oral argument to strongly urge the court to reject the "definitively and specifically" standard. 



Mr. Kohn highlighted the importance of today's decision by stating: ”This is a major victory for SOX whistleblowers. Employees performing their duties discover many corporate frauds and violations and then report concerns to their supervisor. Whistleblower laws, such as SOX, would lose their effectiveness if this common form of raising reasonable concerns was not protected.”

A copy of the decision is available here. 

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Under a new program championed by the National Whistleblowers Center (NWC) to reduce securities fraud, the Securities and Exchange Commission (SEC) today announced its first whistleblower award of nearly $50,000.

The SEC's announcement is the mark of success for its new Whistleblower Program, which was established one year ago after passage of the Dodd-Frank Act. During the Dodd-Frank rule-making process, the SEC approved a variety of proposals made by the NWC that encourage whistleblowers to step forward.

Specifically, NWC proposed incentives for employees who report wrongdoing internally and rewards for employees whether they choose to file their whistleblower claims with the company or with the government.

Stephen M. Kohn, Executive Director of the National Whistleblowers Center, made the following statement: 

This is a major step forward. The SEC Whistleblower Program is demonstrating that it works quickly and effectively to deter fraud. Whistleblowers are the number one resource for detecting fraud, and every agency can learn from the SEC's successful Whistleblower Program. Today’s announcement sends a simple message to securities fraudsters: beware. My hat is off to the SEC for protecting investors.

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This week, the FBI released a public service announcement by actor Michael Douglas encouraging the public to report financial fraud. On its face this sounds like a good thing. However, the FBI left out some key information, namely other avenues of reporting that are likely better for whistleblowers.

There are robust financial incentives for filing a claim with the Securities Exchange Commission (SEC), the Internal Revenue Service (IRS), and the Commodity Futures Trading Commission. NWC General Counsel David Colapinto told the Washington Post if a whistleblower goes “to the FBI, they are probably going to get zero. The FBI’s not obligated to do anything for them.” The FBI’s rewards would be solely at the discretion of the Department of Justice. This is scary. Just take a look at how they treat their own whistleblowers.

As pointed out by the Huffington Post, the financial crisis has put financial fraud on more people’s radar. The SEC has seen an increase in securities fraud reports, despite the fact that nearly 70 percent of Americans are unaware of the SEC’s whistleblower program (see recent report by Labaton Sucharow).

If the FBI is truly interested in encouraging people to come forward and protecting those who do, they should not hide the ball. Give workers information about all their rights, including the much more robust financial reward programs at the SEC, IRS and the CFTC.

We always tell whistleblowers who contact us that is in their best interest to know their rights before they blow the whistle. Make sure you educate yourself and consult an attorney before you blow the whistle.

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Tune in today at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

In the first half hour, Richard Renner and Lindsey Williams discuss the updates in the FDA whistleblower illegal surveillance case, including Senator Grassley’s biting letter to FDA Commissioner Hamburg demanding answers about illegally intercepted communications to Congress, including to and from his office.

You can take action to protect the FDA whistleblowers and demand the government stop illegally targeting whistleblowers for surveillance here.

In the second half hour, Richard interviews Indira Talwani, the Boston attorney who represents corporate whistleblower Jackie Lawson.  Ms. Lawson blew the whistle on major corporate fraud at Fidelity Investments. Last week, in a stunning decision the First Circuit Court stripped Sarbanes-Oxley (SOX) whistleblower protection from Ms. Lawson and countless other contractors and subcontractors of privately held companies. Ms. Talwani expresses her concerns about how the court's decision will affect the ability of the public to discover corporate fraud and discusses the next steps on this critical issue.

Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Tune in tomorrow at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

In the first half hour, Lindsey Williams discusses Dodd-Frank’s impact on corporate compliance programs with Donna Boehme, Principle of Compliance Strategists, LLC and former head of compliance for BP.

In the second half hour, The Gold Agent discusses with Jane Turner his decision to blow the whistle on the gold industry’s deceptive practices and reveals his identity. You can take action to improve protections for whistleblowers by signing the petition.

Submit Your Question to be asked on air during the show or call in live to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Today, the Securities and Exchange Commission Office of the Whistleblower website posted 15 new covered actions that will now be considered for a whistleblower award. A whistleblower must submit a timely application for an award in a covered action within 90 calendar days. The SEC’s website is a vital resource for whistleblowers and their counsel to navigate the SEC whistleblower process to make disclosures and claim an award. You can access the website at this link: http://www.sec.gov/whistleblower and you may review all of the 185 cases (including the new cases posted today) that are eligible for consideration of an award at this link: http://www.sec.gov/about/offices/owb/owb-awards.shtml.

Why is the SEC whistleblower website so important? It can mean the difference between a whistleblower receiving or not receiving a financial award under Dodd-Frank. The SEC Whistleblower Office will publish a list of cases that the SEC considers “covered actions” under the Dodd-Frank and potentially eligible for an award. An individual then has ninety (90) calendar days from the date that “covered action” is posted to apply for an award from SEC Whistleblower Office.

The application does not mean that a whistleblower will automatically receive an award, but if the whistleblower does not submit an application within 90 calendar days of the date the covered action is posted on the SEC web stie they will have no chance receiving an award.

The SEC listed 15 new actions that are covered under the Dodd-Frank Act today. That means that the 90-day clock is rolling for whistleblowers to submit their award application form on those cases. The National Whistleblowers Center strongly encourages whistleblowers to check out the SEC whistleblower awards page regularly so they do not miss their opportunity to apply for a financial reward.

The SEC Whistleblower Office website also allows individuals to submit a tip online, provides answers to frequently asked questions, and has a list of supplemental resources about Dodd-Frank whistleblower awards, including the Final Rules.

If you are looking for legal representation to assist you in reporting fraud to the SEC, the National Whistleblower Legal Defense and Education Fund may be able to help you. You can submit a confidential intake form to the Attorney Referral Service by clicking here.

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A new documentary about the infamous Madoff scandal opens in theaters across the country on Friday August 26th. I am looking forward to seeing Chasing Madoff on Friday and learning more about Harry Markopolos’ struggle to blow the whistle on a financial fraud that rocked the US economy. I highly recommend taking a few minutes to watch the trailer – it just may sell you on going to see the film.

If you are in the Washington DC area, I hope you will join us at the E Street Cinema (555 11th Street, NW) for Friday’s 7:40 pm showing. National Whistleblowers Center President Michael D. Kohn will give a short informative talk after the film detailing the new developments in whistleblower protection since the Madoff scandal. There will be a Q&A session following the talk. The DC premiere event is co-sponsored by Cohen Media Group.

 The Story You Don't Know Behind the Crime You Can't Forget!

Chasing Madoff is produced, written and directed by Jeff Prosserman and is based on the New York Times best seller “No One Would Listen” by Harry Markopolos. The film tells the story of whistleblower Harry Markopolos’ ten-year struggle to expose the harrowing truth behind the Madoff Ponzi scheme. Markopolos and his team pieced together the evidence proving that Madoff was a fraud and tried relentlessly to alert the public. In the end, his whistleblowing led to what Jon Chesto of the Patriot Ledger called a “wake-up call for the SEC [Securities and Exchange Commission].” Congress also passed the Dodd-Frank Wall Street Reform Act to protect and reward whistleblowers like Markopolos who report fraud to the government. Hopefully, the next Markopolos will have more luck alerting the public.

For more information about the film and to find a theater near you click here.

Coming Soon: A review of Chasing Madoff by my colleague Richard Renner

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Today is a big day for corporate fraud detection. The Security and Exchange Commission’s (SEC) Final Rules implementing the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act go into effect. The SEC has simultaneously launched a new Office of the Whistleblower website today. This website will become a vital resource for whistleblowers and their counsel to navigate the SEC whistleblower process to make disclosures and claim an award. You can access the website at this link: http://www.sec.gov/whistleblower and you may review the 170 cases that are now eligible for an award at this link: http://www.sec.gov/about/offices/owb/owb-awards.shtml.

Why is the website so important? It can mean the difference between a whistleblower receiving or not receiving a financial award under Dodd-Frank. The SEC Whistleblower Office will publish a list of cases that the SEC considers “covered actions” under the Dodd-Frank. An individual then has ninety (90) calendar days from the date that “covered action” is posted to apply for an award from SEC Whistleblower Office. The application does not mean that a whistleblower will automatically receive an award, but if the whistleblower does not submit an application they will have no chance receiving an award.

The SEC listed 170 actions that are covered under the Dodd-Frank Act today. That means that the clock is rolling for whistleblowers to submit their form on those cases. The National Whistleblowers Center strongly encourages whistleblowers to check out this page so they do not miss their opportunity to apply for a financial reward.

The SEC Whistleblower Office website also allows individuals to submit a tip online, provides answers to frequently asked questions, and has a list of supplemental resources about Dodd-Frank whistleblower awards, including the Final Rules.

If you are looking for legal representation to assist you in reporting fraud to the SEC the National Whistleblowers Center’s sister organization the National Whistleblower Legal Defense and Education may be able to help you. You can submit a confidential intake form to the Attorney Referral Service by clicking here.

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On July 20th, the Chief of the SEC Whistleblower Office, Sean McKessy, will be speaking at the National Whistleblowers Seminar at the prestigious Willard Intercontinental Hotel in Washington, DC and via conference call. Take advantage of this special seminar and hear from leading whistleblower attorneys who were extensively involved in the Dodd-Frank rulemaking process and the head of the SEC’s Whistleblower Office.

Stephen M. Kohn (Executive Director of the National Whistleblowers Center), Donna Boehme (Principal of Compliance Strategies LLC) and Dean Zerbe (former Tax Counsel on the Senate Finance Committee and current Managing Director of Alliant Group) join Chief McKessy on the panel for this discussion on the newest whistleblower protections. 

Because of this special nationwide training opportunity, the NWC is making the seminar available for teleconference. The event is entitled “The NEW Corporate Whistleblower Protections and Rewards Provisions” and will run from 1:00 pm to 4:00 pm (EDT) on Wednesday, July 20th.   Attorneys will have the opportunity to learn how to use the new corporate whistleblower laws to effectively represent employees, combat fraud, and qualify for large whistleblower rewards. The seminar will explain the new anti-retaliation rules governing corporate employees and the financial reward provisions that require the SEC to pay large financial awards to qualified whistleblowers.

To REGISTER NOW click here. The regular price for the seminar is $295 with reduced fees for ARS members and whistleblowers. For discounts and more information, including agenda and faculty click here.

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The National Whistleblowers Center will be hosting a series of seminars this summer. The first two are in Denver on June 23rd and in San Francisco on June 27th. Stephen Kohn, Executive Director at the National Whistleblowers Center will host his seminar entitled The NEW Corporate Whistleblower Protections and Reward Provisions. The event in Denver will be held at the Browne Palace Hotel and Spa from 2:00 p.m. to 5:00 p.m. (MST). The San Francisco seminar will be hosted by TURN—The Utility Reform Network at their facility from 1:00 p.m. to 4:00 p.m. (PST). Both are CLE-approved for New Mexico, California, and Utah and CLE-pending in Colorado and Nevada (San Francisco is also CLE-pending in Oregon).

In Denver, Mr. Kohn will host a tutorial on the new whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act, in addition to other key whistleblower laws. In San Francisco, Mr. Kohn will also lecture on the Federal Pipeline Safety Act as it relates to whistleblowers.

Attorneys will have the opportunity to learn how to use the new laws to effectively represent employees, combat fraud, and qualify for large whistleblower rewards.The regular price for the seminar is $295 with early bird discounts (register on or before June 10th) and reduced fees for ARS members and whistleblowers. For early bird discounts and more information, including agenda and faculty click here.

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