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“After Cracking Down on ‘Nonsense,’ SEC Whistleblower Program Has Record-Breaking Year”

Law.com interviews Phillips & Cohen partner and former SEC whistleblower office chief Sean McKessy in its Compliance Hot Spots newsletter about trends that have boosted recent successes of the SEC whistleblower program.

Sean McKessy, a partner at the whistleblower firm Phillips & Cohen and the first chief of the SEC’s program, said the pandemic and the shift to remote work led many employees to feel alienated from their jobs and created an environment ripe for whistleblowing activity. Many companies laid off employees or put new responsibilities on their existing workers during the early days of the crisis, and new government relief programs created ripe opportunities for corporate fraud.

Even in the early days of the pandemic, attorneys noticed a spike in whistleblowing activity. Employees have been quitting their jobs at record rates in recent months and working from home has given employees space away from the office.

“I do think COVID led to a perfect storm if you’re on my side and a nightmare scenario on the corporate side, in some ways,” McKessy said. “I think, anecdotally, working from home in some ways emboldens people to report on their own company because I believe when people are going into the office and seeing their colleagues, if they see something wrong, they are generally motivated to work with the people they work with and have those things corrected.”

Without worrying about having to face their supervisor or their colleagues in-person the next day, tipsters likely felt more comfortable and motivated to report to agencies like the SEC, McKessy said.

Read the entire Compliance Hot Spots newsletter After Cracking Down on ‘Nonsense,’ SEC Whistleblower Program Has Record-Breaking Year,” on Law.com. 

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