Law360 interviewed SEC whistleblower lawyer Matt Stock, Director of the Whistleblower Rewards Practice at Zuckerman Law, for an article titled Publicizing Whistleblower Claims Doesn’t Always Pay Off. The article addresses whether publicly exposing accounting fraud while simultaneously shorting the company’s stock can be more lucrative than providing the information to the SEC through the SEC’s whistleblower reward program. In particular, the article focuses on Harry Markopolos’ publicly disclosed report about accounting fraud at GE, which he also submitted to the SEC. According to the article, the authors of the report are “eligible for a cut of any profits the hedge fund made by betting against GE stock.”
Stock observed that most whistleblowers are typically insiders and that few outsiders providing independent analysis disclosures to the SEC (using publicly available information) “would be able to dedicate the time and resources to submitting independent analysis tips” and very few outsiders could get a hedge fund to pay for that analysis.
The article also reports about SEC whistleblowers’ frustration about delays in processing applications for whistleblower awards and proposed amendments to the SEC whistleblower rules that could help reduce the backlog. Stock noted that the SEC “is still moving at the pace of government, but it’s much quicker than the IRS.” Recently the SEC filed a brief opposing a petition for mandamus brought by a whistleblower (essentially a demand for the SEC to determine whether the whistleblower is eligible for an award). The SEC urged the court to deny the petition for mandamus and explained the substantial complexities involved in adjudicating applications for whistleblower awards.
SEC Whistleblower Lawyers
Matt Stock leads the whistleblower rewards practice at Zuckerman Law. He is an attorney, Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. Mr. Stock leverages his experience as an attorney, CPA, CFE and external auditor to assist whistleblowers investigate and disclose complex financial frauds to the government. His practice focuses on representing whistleblowers in rewards cases at the SEC, CFTC, DOJ and IRS.
