The Employment Law Group® Attorney Quoted in ABA Journal Article on Dodd-Frank Whistleblower Protections

The Employment Law Group® attorney Jason Zuckerman was quoted in an Ammerican Bar Association article titled SEC is Giving Whistle-blower Protection One Last Lick:

“After the Bernard Madoff scandal broke the SEC had a lot of egg on its face,” says Jason Zuckerman, principal of [T]he Employment Law Group, a Washington, D.C.-based firm that represents whistle-blowers.

“It’s clear that they need to do more to be responsive to the allegations they get and to encourage employees to report corporate fraud,” says Zuckerman, who co-chairs the Whistleblower Subcommittee of the American Bar Association’s Labor and Employment Section’s Employee Rights and Responsibilities Committee.

The Dodd-Frank Act (DFA) was passed in July of 2010 to deter securities violations by corporations.  The law includes whistleblower reward and protection provisions that require the SEC to provide a monetary reward up to 30% for whistleblowers who report violations to the SEC.  Corporations often characterize whistleblowers as troublemakers and have consistently lobbied the SEC to weaken the DFA’s whistleblower provisions by adopting regulations requiring all whistleblowers to report violations internally to the corporation, rather than to the SEC.  Zuckerman responded as follows:

…[W]histle-blower advocates like [T]he Employment Law Group’s Zuckerman maintain that the backlash against the SEC’s proposed rules is unfounded.

“I don’t think individuals are ever eager to blow the whistle,” says Zuckerman. He co-authored a comment letter to the SEC on Dec. 17 as a member of the whistle-blower advocacy group, Voices for Corporate Responsibility, along with Change to Win, the National Employment Lawyers Association and the Government Accountability Project. “What they want to do is keep their jobs, especially when we have such high unemployment.”

He says whistle-blower programs with robust monetary rewards have proven successful, citing the False Claims Act, whose provisions were strengthened in 1986. The act authorizes whistle-blowers to prosecute contractors for fraud on behalf of the U.S. government. Those claims have resulted in the recovery of more than $24 billion, Zuckerman says.

“There is tremendous empirical evidence that it works,” he says, citing large settlements against companies such as Pfizer and Eli Lilly. “If companies are so concerned about employees blowing the whistle directly to the SEC, then they should enhance their compliance programs to address employee concerns more effectively.”

The groups co-authoring the letter with Zuckerman also worry that the proposed SEC rules don’t address coordination of investigations by overlapping federal agencies, a need they say is “particularly critical where the SEC has limited resources and must respond to claims originating from a universe of approximately 6,700 publicly traded companies and related advisors and entities.”

For more information about the SEC’s Whistleblower Program, click here.

Tagged: Enforcement Bodies, Securities and Exchange Commission (SEC), Whistleblower Laws (Federal)