Phillips & Cohen partner Sean McKessy speaks about the massive success of the SEC whistleblower program in an interview with Law.com’s Compliance Hot Spots.
“The program has worked exactly as intended. It has incentivized people to come forward to report wrongdoing, sometimes on massive scales,” said McKessy, who now represents whistleblowers as a partner at Phillips & Cohen. “There are entities and companies that are in business now and didn’t go the way of Enron because whistleblowers came forward and reported wrongdoing.”
“When you back out from the billion dollars and think about how much money and how many lives have been changed because of the people who have been paid under the program, that billion dollars—frankly it’s mind blowing,” he added.
McKessy said passing the $1 billion milestone is significant not only for symbolic reasons but because it demonstrates the credibility of the program to future would-be whistleblowers. The program, he said, “no longer has to prove itself.”
The SEC program has also created what McKessy called a “cottage industry” of lawyers and firms who represent whistleblowers, and guide them through the yearslong process of obtaining their award.
He said prior to the program, the only avenues for SEC lawyers seeking lucrative jobs in the private sector were to become in-house counsel at a firm regulated by the SEC or take a job at a law firm representing clients regulated by the SEC.
“Now because of the success of the program, there are a number of lawyers, including myself and others, who are able to stay on the ‘side of right’ when they leave the SEC and continue to work towards helping people who want to report fraud, and get it stopped and detected early,” he said.
Read the entire story, “A $1B Benchmark for the SEC’s Whistleblower Program,” in Law.com’s Compliance Hot Spots newsletter.