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“Madoff tipster has some big concerns about SEC’s whistleblower proposal”

Phillips & Cohen whistleblower attorney Sean McKessy is quoted in a National Law Journal article about the SEC’s proposed changes to its whistleblower program. The article frames the changes in the context of commentary from Harry Markopolos, a forensic accountant who raised red flags about Bernie Madoff’s fraud scheme.

Markopolos now worries that proposed changes to the SEC’s whistleblower program could undercut the agency’s efforts to attract tipsters cut in his mold: outside analysts who pull together a puzzle of publicly available information to give regulators an eye-opening picture of fraud.

Phillips & Cohen partner Sean McKessy, the first director of the SEC’s whistleblower program, said the guidance affecting outside analysts stood out as the most concerning portion of the proposed changes.
“This is the most dangerous in the long term for the program,” he told the National Law Journal. “It’s injecting in the opportunity for human beings, well after the fact, to make subjective determinations that I don’t think were intended by Congress.”

Read the full article on The National Law Journal’s website (subscription required).

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