Sep. 12, 2018
BILL SINGER, Esq
[redacted]
http://rrbdlaw.com
http://brokeandbroker.com
RE: Comments on Proposed Rule: Amendments to the Commission’s Whistleblower Program Rules [Release No. 34-83557; File No. S7-16-18]
rule-comments@sec.gov
I am a 36-year Wall Street veteran lawyer, who represented the first in-house compliance officer to whom an SEC whistleblower bounty was paid. Presently, I am handling or consulting on nearly a dozen filed Forms TCR..
In "SEC Whistleblower Program Is A Black Hole Of Despair" (BrokeAndBroker.com Blog, April 9, 2015), http://www.brokeandbroker.com/2735/sec-oig-owb/ I detailed my frustration with the SEC's Office of the Whistleblower ("OWB"), which prompted me to file a complaint in November 2014 with the SEC Office of Inspector General ("OIG"). In "SEC Denies Three Whistleblower Awards" (BrokeAndBroker.com Blog, August 26, 2015) http://www.brokeandbroker.com/2876/sec-whistleblower/, I noted, in part, this:
“As more fully set forth in the April 9th BrokeAndBroker article, in November 2014, I filed a complaint with the SEC's Officer of Inspector General ("OIG") and requested an investigation of what I deemed OWB's dilatory conduct. In submitting my complaint, I was required to participate in a substantial telephone interview by the third-party service provider that the SEC retains for such purposes. During that interview, I provided the sum and substance of my complaint. I then awaited some meaningful follow-up. And I waited. And I still wait.
“In my futile attempts to communicate with OIG, I have referenced the April 9th BrokeAndBroker.com Blog article, which details my exasperation with both OWB and OIG. In response, OIG referred me back to OWB! Additionally, OIG persists in asking me to provide information that I had previously submitted -- but OIG will not acknowledge that it has either misplaced or lost that information and I will not cooperate further without such an admission or explanation to the contrary. Ten months have passed since the filing of my complaint with OIG and there has be no effort to contact me to discuss my concerns.
“Keep in mind that my client was finally awarded about $1.6 million after the publication of the April 9th BrokeAndBroker.com Blog. It's one thing to write me off as disgruntled because my client's claim was denied but it's quite another thing when you're trying to marginalize the grievances of someone who provided substantial assistance to the SEC and eventually gained a sizable award. The system is broken and needs to be fixed.
“Although the SEC and OIG would likely prefer to dismiss my complaints as the cranky musings of a crackpot and gadfly, it turns out that about a month after the BrokeAndBroker.com Blog article, the Wall Street Journal published two articles about the same issues:”
>"SEC Backlog Delays Whistleblower Awards / Claimants are often kept waiting for a decision, data show" (Wall Street Journal, Reporters Rachel Louise Ensign and Jean Eaglesham, May 4, 2015).
>"Whistleblowers Find SEC Rewards Slow and Scarce / The Securities and Exchange Commission offers financial rewards for information on wrongdoing. But many tipsters have found it tough to collect" (Wall Street Journal, Reporters Rachel Louise Ensign and Jean Eaglesham, May 25, 2015).
Those of us who represent whistleblowers frequently practice regulatory law and are often former regulators. We fully appreciate that there are certain responses that would be inappropriate, improper, and, at times, illegal for OWB to provide. Most of us are mindful of that threshold and do not cross it. That being said, it is frustrating and insulting to be treated as if we are representing criminal defendants or regulatory respondents when asking OWB for an status update or guidance on where it the ill-defined pipeline of consideration a given matter stands.. Both OWB staff and whistleblowers are victimized by the lack of specific deadlines from the date of filing of a NoCA and/or WB-APP, to being considered for an award, to being notified of the granting or denial of an award, and the calculation of the percentage of an award. Those cited issues pose deficiencies that are far more pressing than anything set forth in the proposal.
For the reasons noted above, the proposal strikes me as a cynical bit of regulatory grandstanding because the SEC has failed first to respond to historic, substantive complaints about:
unreasonable delays in OWB’s intake process, persistent failures to timely and courteously communicate matters of status with whistleblowers and their counsel, and the counter-productive protocol of delay and non-responsive communications that accompany the NoCA and WB-APP filings. Before tackling limits on awards and the promulgation of expanded regulatory discretion, the SEC should first enhance the transparency of the purely procedural/administrative aspects of its whistleblower program.
Ultimately, File No. S7-16-18 comes off as a series of answers to questions that no one is asking – and as a classic example of second things first.