Read Before Whistleblowing: What Every Lawyer Needs to Know


In wake of ethics opinion, lawyers in New York — if not elsewhere — must think hard before considering whether to participate in the Dodd-Frank Whistleblower Award Program. A recent SEC whistleblower award of $14 million may offer a persuasive incentive for lawyers to blow the whistle on a client’s perceived wrongdoing. However, a subsequent ethics opinion from the Committee on Professional Ethics of the New York County Lawyers’ Association will give lawyers pause. As the SEC whistleblower award program gains momentum, New York lawyers may be well advised to wait for the courts to determine whether the SEC’s rules can pre-empt state rules of professional conduct.

Background -

On October 1, 2013, the US Securities and Exchange Commission (SEC) announced a watershed $14 million award paid to an unidentified whistleblower who provided information that led to an enforcement action involving the recovery of investor funds. This was by far the highest award paid to date under the SEC whistleblower award program established pursuant to the Dodd-­Frank Wall Street Reform and Consumer Protection Act of 2010. Without a doubt, there are potentially enormous incentives for individuals to come forward with information and participate in the SEC whistleblower award program. What about for lawyers?

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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