SEC Official Encourages Competitive Whistleblowing and their Lawyers
The SEC’s Enforcement Director, Andrew Ceresney, lauded the SEC’s whistleblower program while encouraging competitive whistleblowing and lawyers that represent whistleblowers. Mr. Ceresney expressed his appreciation for whistleblowers, the success of the program, and its “transformative impact.” Although approximately half of award recipients were current or former employees of companies for which they reported wrongdoing, Mr. Ceresney also encouraged whistleblowing by company outsiders who have in-depth market knowledge. Mr. Ceresney also lauded whistleblower lawyers who help manage client expectations and ensure confidentiality.
OUR TAKE: Mr. Ceresney’s comments may hasten the spread of competitive whistleblowing whereby industry competitors use the SEC’s enforcement mechanics to hobble a rival. Also, encouraging whistleblowing lawyers could revive the same sort of securities class action lawyers that plagued the securities markets in the 1980s and 1990s.