Phillips & Cohen attorney criticizes Washington Post story about SEC whistleblower

The Washington Post ran the following letter to the editor on July 31, 2010, from Phillips & Cohen attorney Erika A. Kelton:

I was stunned to see The Post refer to a person's decision to report illegal insider trading as "ratting on" the offender ["SEC now freer to hike whistleblower awards," Economy & Business, July 27]. The use of such a negative term about a whistleblower is one reason so many people don't report wrongdoing.

I have represented whistleblowers for more than 20 years, some of whom have received large rewards through government programs. The flip side is they often must endure ostracism and job retaliation for years before they have even a chance for a reward.

In this particular case, perhaps the Post writer chose to be glib because an ex-wife was the whistleblower. But information from insiders is key to effective enforcement on Wall Street, which is why Congress recently created a stronger whistleblower reward program for securities law violations. The hundreds of investors who lost their life savings to Bernie Madoff's Ponzi scheme can only wish that Madoff's wife had made the same decision to "rat on" her husband as hedge fund manager David Zilkha's ex-wife did.

Erika A. Kelton, Washington