Tag Archives: Stephen M. Kohn

Bipartisan Bill Offers Needed Reforms to SEC Whistleblower Program

By Stephen M. Kohn and Geoff Schweller

Photos of the authors

Stephen M. Kohn and Geoff Schweller (photos courtesy of the authors)

Since it was established in 2010, the U.S. Securities and Exchange Commission (SEC) Whistleblower Program has emerged as the gold standard for whistleblower award programs. Through a combination of anonymous reporting channels, anti-retaliation protections, transnational reach, and mandatory whistleblower awards, the program has generated tens of thousands of tips, resulted in the collection of over $6 billion in sanctions from fraudsters and the return of over $1.3 billion directly to harmed investors.

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Crippling the FCPA Is Bad Business for the U.S.

by Stephen M. Kohn

Photo courtesy of the author

On February 10, President Donald Trump issued an Executive Order (E.O.) to pause enforcement of the Foreign Corrupt Practices Act (FCPA). The E.O. is based upon the inaccurate premise that the United States’ enforcement of the anti-bribery law unfairly cracks down on U.S. companies and harms their competitiveness in the global marketplace. During the pause, the Justice Department will reevaluate the enforcement strategies behind the FCPA, and presumably approve a new approach to FCPA enforcement. But the intent behind the Executive Order does not bode well for future U.S. prosecutions of criminal bribe paying in foreign countries.

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Will the Justice Department’s “90-Day Sprint” Creating a New Whistleblower Program Permit Confidential or Anonymous Reporting?

by Stephen M. Kohn

Photo of the auhtor

Photo courtesy of Kohn, Kohn & Colapinto LLP

On March 7, 2024, in speech before the American Bar Association, Deputy Attorney General Lisa Monaco announced a “90-day sprint” to establish a new Justice Department whistleblower program. The DAG’s reason for announcing the new program was clear:

Ever since Dodd-Frank created whistleblower programs at the SEC and the CFTC, those agencies have received thousands of tips, paid out many hundreds of millions of dollars, and disgorged billions in ill-gotten gains from corporate bad actors.

Yet both programs, and similar ones at IRS and FinCEN — by their very nature — are limited in scope. They only cover misconduct within their agencies’ jurisdictions. . .

These programs have proven indispensable — but they resemble a patchwork quilt that doesn’t cover the whole bed. They simply don’t address the full range of corporate and financial misconduct that the Department prosecutes.

So, we are filling these gaps.

The critical issue facing the Justice Department is precisely how they will “fill these gaps.”  Among the most pressing concerns is confidentiality.  Whistleblower advocates have uniformly asked the Justice Department to permit anonymous and confidential reporting as is currently permitted by the U.S. Securities and Exchange Commission (SEC) under the highly successful Dodd-Frank Act.  However, the U.S. Department of Justice (DOJ) has historically not permitted anonymous or confidential whistleblower disclosures to the department.  The current DOJ-approved procedures require all “human sources” to undergo an extensive background screening making anonymous reporting impossible.  Even when a whistleblower is granted confidential informant status, the current procedures permit the DOJ to waive confidentiality essentially at-will. 

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Empirical Data Supports Efforts to Reform Internal Corporate Whistleblower Protections

by Stephen M. Kohn, Alyce Petit, Kate Reeves, and Geoff Schweller

Photos of the authors

Left to Right: Stephen M. Kohn, Alyce Petit, Kate Reeves and Geoff Schweller (photos courtesy of authors)

Corporate whistleblowers who report through internal compliance channels face higher rates of retaliation than those who report externally to the government, according to research published in a working paper on the Social Science Research Network (SSRN).

An analysis of 8-years worth of Dodd-Frank Act and Sarbanes-Oxley Act (SOX) whistleblower retaliation cases found that over 90% of the cases involved internal whistleblowers.

These findings are of particular importance in light of Congressional efforts to amend the Dodd-Frank Act to extend anti-retaliation protections for internal whistleblowers. They also validate the importance of regulations by the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) that explicitly do not require whistleblowers to make internal reports prior to qualifying for a reward under the Dodd-Frank.

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