Major Corporate Defense Law Firms Are Representing Whistleblowers

Over the years, we would ask corporate lawyers at major corporate defense firms  – would you ever consider representing a whistleblower?

Stephen Kohn

Almost universally, the answer has been – No, we only do corporate defense work.

In fact, corporate defense lawyers increasingly now are representing whistleblowers. They don’t want anyone to know about it. And they thought, because of the secrecy involved with protecting Dodd-Frank whistleblowers, that no one would know about it.

But thanks to recently released documents from the Securities and Exchange Commission (SEC), pried out by Freedom of Information Act (FOIA) requests, we know that at least three major corporate law firms – Winston & Strawn, Haynes & Boone, and Akin Gump – have successfully represented whistleblowers before the SEC. And there are probably hundreds more pending whistleblower cases represented by major corporate defense firms.

According to these documents, Michael Asaro, a partner at Akin Gump in Washington, D.C., secured an award of $800,000 for a whistleblower client. 

Seth Farber, a partner at Winston & Strawn, secured an award of $2.2 million for a whistleblower client.

And Kit Addleman, a partner at Haynes & Boone, secured an award of 20 percent of the sanction for a whistleblower client.

“I have not been retained directly for the purpose of being a whistleblower’s counsel,” Addleman told Corporate Crime Reporter in response to an inquiry. “But rather I have been retained to represent specific clients in government investigations who have been able, in isolated instances, to make a whistleblower claim for an award.”

Asaro and Farber did not return calls seeking comment.

Stephen Kohn, a partner at Kohn, Kohn & Colapinto in Washington, D.C., is a whistleblower lawyer and he is amazed at this turn of events – that major corporate defense firms are now representing whistleblowers. 

He says these corporate law firms do not want this fact made public “most likely because they did not want to upset their bread-and-butter corporate clients.”

And Kohn says that the largest SEC whistleblower award ever, the $279 million whistleblower award announced earlier this year, likely was brought by a major corporate defense firm.

“The size of the award meant that it had to be a really good insider,” Kohn told Corporate Crime Reporter in an interview last month. “You are looking at top corporate officials blowing the whistle. It would go to the top five whistleblower firms who are known, or I guess to a corporate firm.”

If it was one of the top five whistleblower firms, would you know about it?

“You would know about it very quickly,” Kohn said. “It would all come out. They would use it to get more clients. We publicize some of our largest cases. But we do it without saying anything that would reveal the whistleblowers. It’s very easy to reveal a large case with no identifying information. Every single Dodd-Frank and IRS case we do is anonymous and confidential.”

Why did the SEC reveal the names of the corporate lawyers who were bringing these cases?

“Everybody thought that everything occurring within the SEC was confidential. Those corporate law firms would have no idea that their names would ever be revealed. It was the tenacity of this Professor (Kansas University School of Law Professor Alexander Platt) who got it all revealed.”

“Whether they are going to continue to make these public we do not know. But we do know that because of the FOIA request from the Professor, they released the names of all of the lawyers who got any rewards. And consequently they revealed that corporate firms were quietly participating in these cases.”

And those corporate firms were also defending against whistleblower cases?

“Yes. All major defense firms are defending SEC whistleblower cases. Winston & Strawn is one of the largest defense firms out there. We were fighting them on hush money cases.”

The reason they don’t want to publicize the fact that they are bringing plaintiff side SEC whistleblower cases is because their corporate clients will say – if you are representing corporations in these cases, you can’t at the same time be out there pointing fingers at corporations?

“That’s one way of looking at it. There is another way of looking at it. Revolution. If the goal is to fight corruption, these major corporate firms clearly have some of the best information of where some of the crimes are, it’s an interesting dynamic. I don’t know how it all plays out. Do these firms now say they will never represent a whistleblower? How will their clients react? It’s hard to say how it plays out.”

“But guess what? There are 65,000 cases pending at the SEC. These corporate firms probably already filed hundreds of cases that they can’t pull back. So how is it going to play out? Will they get an exemption so that they don’t have to release the names of the lawyers? We don’t know how it is going to play out. But there has never been anything like it.” 

“Just imagine if the top law firms were representing polluters, and at the same time they were secretly representing environmental groups. I don’t think there has been something like this.”

“They did it because they felt they could do it without being caught.”

Well, they are also seeing it as a profit center. For a $279 million whistleblower award, what would the lawyer’s fee be?

“It’s all over the map. It could be as low as five percent and as high as forty percent, depending on the dynamics.”

That could be an $80 million windfall for that law firm?

“Correct. I know corporate lawyers who tell me that they would love to represent whistleblowers, but they can’t. But this is a reflection of the success of these laws. If you take a step back, you are looking at laws that have been the most effective in detecting large scale corporate crime ever. They are transnational in nature. They cover the public economy and commodities. They just hit banking real time – the Bank Secrecy Act and money laundering, all FARS, all sanctions. These laws are so successful that these corporate firms have risked alienating clients to get involved. That’s a testament to the success of these laws and why they need to be radically defended.” 

“We sit here and we know what’s coming down the road. We know there is going to be a massive backlash to limit these laws, repeal, stop, screw them up.” 

“The Chamber of Commerce and their allies know right where to hit these laws. Last term, Senator Charles Grassley (R-Iowa) put forth a very modest amendment to the False Claims Act. Essentially it was that the Department of Justice can’t unilaterally dismiss cases. They at least need a reason to do it that a court can uphold. They were very small points. Grassley had it approved with bipartisan support through all of the committees. And it was supposed to end up on the infrastructure bill.” 

“Then the American Hospital Association, the Chamber of Commerce and their allies came out in the middle of the night, whacked it, and in 72 hours killed the bill. They wiped out a bipartisan bill in a flash.” 

“I was at a conference the other day. And someone from the Commodity Futures Trading Commission said that every one of their cases is now coming from a whistleblower.”

“I just wanted to add about our Whistleblower Law Library. The overwhelming majority of whistleblowers even in the SEC program are moving pro se. And a lot of pro se people have gotten awards, but it’s easy for them to screw things up. On the retaliation side, it’s probably 90 percent pro se. Whistleblowers find our book – Rules for Whistleblowers – very useful. And then the Whistleblower Law Library is an easy companion. A pro se person can use the book and the library and do pretty well. A good percentage, like 20 percent of the SEC cases, are brought pro se.”

Your Whistleblower Law Library is a great resource. It lists 37 rules plus a conclusion – Can Whistleblowers Drive a Spike Through the Heart of Corruption? 

Rule 9 is – Should you tape?  What is your nutshell answer?

“In many of the absolute best cases, whistleblowers have taped. We have won retaliation cases based on the tape. But also in these reward cases, whistleblowers are taping – or recording. Whistleblowers tape. That’s a fact of life. Whether they tell the lawyer or not, they record. It’s absolutely essential that whistleblowers understand whether they can tape or not. If it’s not admissible in court, why are you taking the risk? But if it is admissible and can be used, then it’s something to be considered. Our law firm does not advise pro or con. It’s a major decision. But most of our whistleblowers come with tapes in hand.”

Rule number 4 – it takes a rogue to catch a rogue.

“The stereotype of who a whistleblower is no longer works. Most of my clients are boy scouts and girl scouts. They are good people. They don’t like what they see and they fit the mold. But the law will allow a participant in. I don’t know of any case where a kingpin or anyone who has planned or initiated one of these frauds has ever been covered by the law.” 

“But I do have a case where the whistleblower was actually a guy who handed the cash to the ministers. He’s definitely involved. But it wasn’t like he came up with the idea. He was told – we are going to be bribing these people. Here’s the money. Go deliver it.” 

“He was a fantastic whistleblower. It’s almost like getting a drug dealer to turn on the drug kingpin. Once you start seeing whistleblowing as an arm of law enforcement, many preconceived notions, including of ethics, fall to the wayside. The goal is to stop corruption and hold the largest criminals accountable.”

Historically, whistleblower reward laws have had bipartisan support to fight corporate crime. Is that still the case?

“When people on the inside, Democrat or Republican, see how the larger awards generate the best cases, and have a positive impact on fighting corporate crime, they shift over.” 

“We saw that within the SEC. Three commissions who had initially supported limiting awards, all changed their lines. That was in September 2020, they all switched. Some switched aggressively. It wasn’t just – we won’t cap it. They had a different opinion – large awards work.”

“I pray that whistleblowing never becomes partisan like so many other issues,” Kohn said.

[For the complete Interview with Stephen Kohn, see page 37 Corporate Crime Reporter 23(12), June 5, 2023, print edition only.]

Copyright © Corporate Crime Reporter
In Print 48 Weeks A Year

Built on Notes Blog Core
Powered by WordPress