SEC FOIA Documents Reveal Major Legal Defense Firms Confidentially Represent Dodd-Frank Whistleblowers

Documents obtained under the Freedom of Information Act (FOIA) from the United States Securities and Exchange Commission (SEC) reveal that major corporate law firms “Big Law” represent confidentially or discretion of whistleblowers in whistleblower reward cases filed under the highly successful Dodd-Frank Act. Prominent companies, such as Winston & Strawn and Akin Gump, have already won whistleblower reward judgments in complaints filed against corporate criminals.

“The revelation that the most notorious anti-whistleblower law firms are quietly representing whistleblowers in SEC enforcement cases has come as a shock,” Stephen M. Kohn said. Kohn is a whistleblower attorney who filed the FOIA request on behalf of Whistleblower Network News (WNN) and the National Whistleblower Center (NWC). “The potential for massive conflicts of interest is evident,” Kohn said, “as these companies base their practices on defending companies accused by whistleblowers of engaging in bribery, money laundering and corruption. securities fraud”.

WNN reviewed the websites of major companies that have successfully represented whistleblowers who have reported material violations of securities law under Dodd-Frank. Neither of the two largest firms has taken credit for winning a Dodd-Frank whistleblower case or disclosed that it represents whistleblowers in SEC investigative proceedings. .

WNN reviewed the 1,034 pages of FOIA documents released by the SEC and carefully compiled a list of the 64 law firms that successfully obtained a reward on behalf of a whistleblower. Of these companies, six primarily represented corporations and individuals accused of corporate crimes.

“The SEC has performed an important public service by making these disclosures,” said NWC executive director Siri Nelson. “Whistleblowers need to know that companies that make millions of dollars defending corporate criminals are also trying to represent them. The interests of whistleblowers may conflict with the mainstream clientele. It appears that some of the defense companies attempted to take advantage of Dodd-Frank’s confidentiality rules in order to hide their representation of whistleblowers from their corporate clients. I hope that’s not the case,” Nelson said.

The number of defense companies now representing whistleblowers may be significantly higher than the six companies identified in SEC FOIA documents. The vast majority of the Dodd-Frank cases are still under review by the SEC, and the corporate defense firms involved in those cases were not disclosed in FOIA responses. “This is the tip of the iceberg. Given the long timelines for resolution of a whistleblower complaint, which can often take at least five years or more, there are most likely hundreds of whistleblower cases pending where major defense companies filed confidential complaints,” Kohn said.

All cases handled by corporate defense firms have resulted in significant penalties against companies or individuals who have violated the Securities and Exchange Act. The Dodd-Frank Act only authorizes the payment of a reward if the penalties to be paid exceed $1 million.

“It’s hard to understand how a corporate defense firm can have ‘undivided loyalty’ to whistleblowers who disclose high-profile fraud. When a whistleblower files a case, it is often impossible to determine how far the frauds may go and which companies may be involved in a conspiracy. Whistleblowers need lawyers who aren’t afraid to follow the facts wherever they lead,” Kohn said.

“Whistleblowers are a unique and sensitive type of client. Their identities, jobs, livelihoods and safety are all threatened with every passing minute as they pursue a case. When represented by a firm that historically protects large corporations and corporations involved in fraud, whistleblowers can be taken in very badly,” Nelson added.

defense firms

SEC filings identified the following defense firms as having obtained monetary rewards on behalf of whistleblowers who filed complaints under the Dodd-Frank Act:

Winston & Strawn, LLP: A Big Law defense firm that successfully represented a whistleblower was Winston & Strawn. Winston & Strawn is proud to defend corporations and white-collar criminals in “whistleblower and qui tam” cases: manipulation.” The company boasted that it had “defended hundreds of employers across litigation brought by “employees,” including those involving whistleblowers” and that his “team represents banks, funds, investment advisers, brokers, insurers, utilities, and credit card companies. in a range of compliance and enforcement matters…including government and whistleblower actions.

The lawyer who represented the whistleblower did not go public with his success in securing a $2.2 million whistleblower reward. His website mentions other clients. These include a former partner in the disgraced audit firm of Arthur Anderson (the firm that played a key role in the ENRON scandal), Deutsche Bank and the chief financial officer of the NRA.

The Winston & Strawn whistleblower client was awarded a $2.2 million reward.

Akin Gump Stauss Hauer & Feld LLP: Akin Gump describes his practice as pro-defence: “We regularly represent clients, including companies and individuals based in the United States and around the world, in investigations by the Securities and Exchange Commission ( SEC), the Commodity Futures Trading Commission (CFTC), self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA), and state regulators. Akin’s website did not mention his successful representation of a whistleblower in a securities fraud case.

Akin Gump’s whistleblower client got $800,000 reward.

Haynes and Boone, LLP: The 600-lawyer firm Haynes and Boone makes no secret of the fact that it represents “employers” in lawsuits against whistleblowers: “We have represented employers and tried cases in state and federal courts involving a wide range of employment-related matters, including. . . alleged unlawful discrimination in dismissal. . . reprisals. . . whistle. . . and other labor-related tort claims. They represent more than 40 public companies ranging in size from small cap companies to large cap multinational business entities” and “clients trade on all major US stock exchanges. . . [and] many foreign markets.

Haynes and Boone’s whistleblower client got a price for 20% of the penalties collected by the SEC.

Levine Lee LLP: Levine Lee presents itself as an experienced firm representing clients accused of violating anti-fraud laws. As the firm’s website explains, their lawyers “have represented clients in matters initiated by Department of Justice, Securities and Exchange Commission, Financial Industry Regulatory Authority. . . and local prosecution authorities. Our areas of expertise include investigations relating to compliance with securities laws and regulations, accounting fraud, insider trading, mail and wire fraud, foreign corrupt practices law, banking secrecy law and anti-money laundering requirements, international regulatory issues, and public corruption.

Levine Lee’s whistleblower client got a $10 million reward.

Manager Berkon Colao & Silverstein LLP: Their website describes their corporate practices as “representing public and private companies, officers, directors, senior executives, broker/dealers and dealers in securities class actions. . . market manipulation. . . and other investment-related disputes. . . [The firm] has extensive experience representing hedge funds and private equity firms in various disputes. . .”

In separate cases, Leader & Berkon’s whistleblower clients won rewards of $15 million and $27 million.

Sallah Astarita & Cox, LLC: Sallah Astarita & Cox “regularly represents financial institutions, brokers, financial advisors, investor relations firms, insurance agents and other clients. . . in matters arising from allegations of fraud, breach of fiduciary duty, failure to supervise, accounting misconduct and negligence. The firm’s website also explained that it had “advocated” for “corporate officers” “before securities regulators.”

Sallah Astarita & Cox’s whistleblower client has secured a $1.8 million award.

The FOIA request

WNN‘s investigation into law firms that successfully represented whistleblowers under Dodd-Frank was launched after Bloomberg Law and Professor Alexander Platt of the University of Kansas obtained the names of all law firms that had prevailed in SEC whistleblower cases. Bloomberg and Professor Platt published about the FOIA documents, but failed to mention that six traditional defense firms had represented whistleblowers and won over $56 million in whistleblower rewards. alert.

The FOIA documents paint a picture of a whistleblower program open to all legitimate whistleblowers. Over 50 pro whistleblowers have won lawsuits on their own behalf, the majority of firms that have won whistleblower cases had no internal ties to the SEC (and did not employ not former SEC attorneys), and the Commission was also open to obtaining information from defense attorneys and pro-whistleblowers. The SEC has not protected the identity of any lawyer who successfully practiced before the Commission.

“The SEC’s whistleblower program is highly professional. FOIA documents demonstrate that there is no favoritism in the administration of whistleblower investigations. All whistleblowers with valuable information about securities law violations should take advantage of this highly effective program,” said NWC Managing Director Siri Nelson.

Further reading:

List of Law Firms That Achieved Awards in Whistleblower Cases in 2021

List of awards obtained by the six defense law firms

List of pro se cases where whistleblowers have obtained a reward

SEC Dodd-Frank Act Program FAQs

Dodd-Frank Act Claims Privacy FAQs

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