In a petition for a writ of mandamus filed on April 29, 2019 with the U.S. Court of Appeals for the D.C. Circuit, an unidentified whistleblower who claims to have tipped the SEC to alleged violations of the Foreign Corrupt Practices Act (“FCPA”) by Teva Pharmaceuticals more than eight years ago asked the court to compel the SEC to preliminarily determine within 60 days if he is eligible for compensation under the SEC’s whistleblower program and issue a final order within six months.  In re: John Doe, No. 19-1095 (D.C. Cir.).

According to the petition, the purported tipster submitted a detailed, 42-page tip regarding Teva’s alleged violations of the FCPA in May 2011 that resulted in the prosecution by the SEC and DOJ of successful enforcement actions regarding that same conduct and the recovery of $519 million from Teva.  The petitioner maintains that he submitted a timely claim for an award in April 2017 and the SEC’s more than two-year delay in issuing a determination is unreasonable, as adjudicating his claim is a “simple task” that requires little more than a conversation between SEC claim reviewers and investigative staff and a review of a “confined record entirely within the agency’s knowledge.”

On July 11, 2019, the SEC filed its opposition to the petition.  In its response, the SEC said that the petitioner “greatly misapprehends the work, effort, and time involved in reviewing whistleblower claims, including his.”  It noted that contrary to the petitioner’s suggestion that he was the only claimant for a whistleblower award relating to the Teva matter, there were actually a total of six claimants whose claims must be assessed to determine their absolute and relative entitlements, if any, to an award.  The agency argued that review of the claims was a complex and time-consuming task that had to be balanced against the SEC’s need to devote resources to its other critical responsibilities.

Although the purported whistleblower in this matter is unhappy about the delay, the SEC’s whistleblower program has been very active and has continued to expand.  As we previously reported, the SEC received a record number of tips in FY 2018 (5,200) and awarded more money to whistleblowers in FY 2018 (more than $168 million) than in all of the program’s prior years combined, though this money was distributed among only 13 individuals and the percentage of awards to tips remains extremely low.

We will be monitoring this case and will report on future developments.

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Photo of Lloyd B. Chinn Lloyd B. Chinn

Lloyd B. Chinn is a partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative…

Lloyd B. Chinn is a partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative agencies in New York and across the country. Lloyd’s practice ranges from litigating compensation disputes to defending whistleblower, discrimination and sexual harassment claims. Although he represents employers in a wide range of industries, including law, insurance, health care, consulting, media, education and technology, he focuses a substantial portion of his practice on the financial services sector. He has tried to final verdict or arbitration award substantial disputes in this area.

Due to Lloyd’s litigation experience, clients regularly turn to him for advice regarding the full range of employment matters, including terminations, whistleblower policy and procedure, reductions in force, employment agreements, and employment policies. For example, in the wake of the financial crisis, he has counseled a number of firms through reductions in force and related bonus and deferred compensation disputes. Lloyd has also been retained to conduct internal investigations of allegations of workplace misconduct, including claims leveled against senior executives.

Lloyd has represented global businesses in matters involving Sarbanes-Oxley and Dodd-Frank whistleblower claims. He has taken an active role in the American Bar Association on these issues, currently serving as Co-Chair of the Whistleblower subcommittee of the ABA Employee Rights and Responsibilities Committee. Lloyd has spoken on whistleblowing topics before a numerous organizations, including the American Bar Association, ALI-ABA, Association of the Bar of the City of New York, and New York University School of Law. He has testified twice before Congressional subcommittees regarding whistleblower legislation and has also published blog postings, articles and client alerts on a variety of topics in this area, including the Dodd-Frank Act’s whistleblower provisions. Lloyd is a co-editor of Proskauer’s Whistleblower Defense Blog, and he has been widely quoted by on whistleblower topics by a number of publications, including the New York Times, the Wall Street Journal, the National Law Journal and Law 360.

Lloyd has also become active in the International Bar Association, presenting on a variety of subjects, including: the #MeToo movement, the COVID-19 pandemic and employment law, and cross-border harmonization of employment provisions in transactions. Lloyd also hosts a quarterly roundtable discussion among financial services industry in-house employment lawyers. He has also published articles and given speeches on a variety of other employment-law topics, including non-solicitation provisions, FINRA arbitration rules, cross-border discovery, e-discovery, and the use of experts.

Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims.

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.