In an exclusive article, Whistleblower Network News (WNN) recently revealed, for the first time, that large corporate defense firms have represented whistleblowers who have received awards through the U.S. Securities and Exchange Commission (SEC) Whistleblower Program. In a new piece for the National Law Review, leading whistleblower attorney Stephen M. Kohn examined the implications of this shift in legal representation for whistleblowers.
“Whistleblower representation is entering a new world,” writes Kohn, a founding partner of Kohn, Kohn & Colapinto. “The ‘iron curtain’ that formerly separated law firms that represent corporate crooks from those that represent whistleblowers has fallen. This new reality is not without serious risks to whistleblowers (and corporate clients).”
Kohn overviews the findings of WNN’s investigation into over 1000 documents it received from the SEC in response to a Freedom of Information Act (FOIA) request. WNN found that out of the 64 law firms identified in the documents as having represented whistleblowers who received awards from the SEC, 6 were primarily corporate defense firms. “That defense firms are now actively engaged in representing whistleblowers cannot be denied,” Kohn said of the revelation.
“Whistleblowers must be fully aware of the dangers of having a corporate law firm represent them,” continues Kohn. “Corporate law firms must institute procedures to guard against conflicts of interest and to ensure they can zealously represent whistleblowers. Zealous representation is needed even when the precedents established in these cases may create trouble for their other client base.”
Kohn outlines a number of procedures which he recommends corporate law firms implement in order to ensure they represent whistleblowers to the best extent possible. One recommendation Kohn makes is that firms should publicly disclose that they represent whistleblowers. Kohn notes that of the six defense firms identified by WNN, only one listed its SEC whistleblower award case on its website.
“Whistleblower clients need full disclosure of how the defense firm’s primary practice may impact the representation,” Kohn further adds. “This is particularly true whenever a case would require advocacy on behalf of a whistleblower that could expand legal interpretations benefiting whistleblowers. It is hard to reconcile how a law firm defending some clients against whistleblowers can effectively argue before administrative agencies or courts of law legal precedents that could expand the rights of whistleblowers. These expanded rights could and would ultimately not be to the advantage of corporate clients accused of wrongdoing.”
“At the end of the day, the fact that defense law firms are now representing whistleblowers affirms the success of Dodd-Frank,” Kohn writes in conclusion. “It is an affirmation of the critical nature of the information whistleblowers provide to the government and the role of this insider information in stopping otherwise hard to detect corporate crimes. The “iron curtain” has fallen, but it has fallen in the direction that helps whistleblowers. It has fallen in the direction that affirms the quality of their disclosures. It refutes the often-repeated slander that whistleblowers are somehow simply disgruntled employees.”