Interview with Jordan Thomas / Labaton Sucharow LLP

For six years Jordan Thomas has led the whistleblower representation practice at Labaton Sucharow LLP, which specializes in SEC cases. Thomas, a former assistant director in the SEC’s Enforcement Division, has worked as the practice’s sole partner, “borrowing” associates from the firm to help. But in May, as talk of the new administration’s desire to dismantle Dodd-Frank continued to swirl, Thomas made a startling announcement. He had just hired three partners to boost the practice to another level. The new hires were Steven Durham, former chief of the Fraud and Public Corruption Section of the U.S. Attorney’s Office in Washington, D.C.; Timothy Warren, former associate director in the SEC’s Enforcement Division; and Robert Wilson, former deputy assistant director in the Enforcement Division. We couldn’t help but wonder: Why three, and why now? The interview has been edited for style and length.

MCC: You went from having one lawyer who was doing this to four.

Thomas: Well, we had other attorneys that supported the practice. We borrowed associates from other areas. We had a dedicated associate up until a little while ago, so we had really two dedicated people, and then we would borrow as needed. But this is a significant increase of dedicated personnel. It’s also unusual in the law firm context because typically law firms are built on leverage. So you have one partner and as many junior people as that partner can manage to do the work. And we have adopted kind of a counter approach. We want to have the most senior people representing whistleblowers because we tend to represent very senior people, they’re used to dealing with very senior people, and the stakes are very high. My view is that we should have a “no amateurs” rule. Only partners will work on these cases.

The other aspect of our practice that’s a little different is that we work on cases collaboratively. In the traditional law firm model you’ll have one partner and he will manage junior personnel, and there won’t be many other senior people at the firm working on the matter. Here we’re going to have one lead partner, and he’s going to be the primary. But then we’re going to have three other partners who will be working with both that partner and the client. So the client effectively gets four partners for the price of one.

MCC: Why did you decide to hire three, and why now?

Thomas: The number of clients that are making inquiries is continually growing. And we believe that in the coming years we’re going to continue to see growth in the number of SEC whistleblowers coming forward, in part because every year, with every award that’s issued, the awareness in financial services and corporate America grows.

MCC: Is this a prediction of what you expect, or a move to accommodate the work you already have?

Thomas: We could have easily only hired two people, and three of us could have managed that workflow. But we anticipate a continued growth in this area. We have a long-term view at Labaton.

MCC: Can you give me a sense of how many clients you currently represent?

Thomas: We never disclose the exact number of clients, but what I can tell you is that historically we’ve accepted fewer than 12 cases per year. We are a low volume, ultraselective practice. We have approximately 40 active cases.

MCC: How long do cases usually take to resolve?

Thomas: SEC investigations typically take two to four years to complete. And then, once the SEC announces a successful enforcement action, it’ll take another 12 to 18 months for the client to receive the monetary award. And so the lifecycle of these cases is five years or so.

MCC: You’re a guy who spent a lot of years at the SEC. You’ve got some people you’re working with now who did likewise. I’m sure you have plenty of sources there. What changes do you expect from the SEC under the Trump administration?

 Thomas: President Trump has been very clear that he wants to lift the burden of regulation off businesses so that they can create more jobs, and I take him at his word. I think that we’re going to see a significant reduction in regulations governing the financial services area and the area that the SEC regulates. I don’t see a significant change as it relates to the enforcement function of the SEC. I’ve worked at the Department of Justice and the SEC during both Democratic and Republican administrations, and my experience is that fraud is a bipartisan priority. And I expect that Chairman [Jay] Clayton and his co-directors of enforcement, Steven Peikin and Stephanie Avakian, will have a commitment to policing Wall Street.

MCC: There was talk that started during the presidential campaign about rolling back Dodd-Frank. Of course the SEC whistleblower program was part of that legislation. What do you expect to see as far as Dodd-Frank is concerned?

Thomas: It’s hard to predict what Congress will or won’t do. But my sense and our firm’s belief is that the SEC whistleblower program will not be significantly impacted by any changes to Dodd-Frank. And we obviously are putting our money where our mouth is because we’re hiring three very senior and well-regarded federal prosecutors to our practice. And we exclusively focus on SEC whistleblower cases, so if we thought the future was in doubt, we would not have hired these folks.

MCC: Speaking of which, can you talk about their compensation? Are they guaranteed certain base levels of income, and do the awards that your clients receive affect salaries for the people in your unit?

Thomas: Unfortunately, we are not permitted to talk about the employee salaries and compensation. What I can tell you is that each of these new partners could have left the SEC or Department of Justice and gone into private practice at well-known law firms and made more than $1 million a year. And the fact that they did not choose that path is gratifying to our firm. I think that it shows the power of the opportunity to do righteous work because what we do is very much a continuation of the kind of work that each of them dedicated the majority of their careers to.

MCC: The president has seemed to gleefully orchestrate an unprecedented rollback of regulatory agencies by appointing leaders who have advocated the dismantling of the same organizations that they now lead. So far I don’t see any of that in the areas we’re talking about. Do you anticipate anything of that kind in your area of focus?

Thomas: Again, I don’t anticipate a significant change in how the federal laws are enforced. I do think that President Trump and I do believe Chairman Clayton have indicated the desire to reduce the regulatory burden on corporations with the hopes that that will increase jobs on Main Street. But from an enforcement perspective, I don’t expect a significant sea change with the one exception of staffing. Across the government, budgets are being frozen or reduced, and that will mean that the SEC will have fewer resources to hire staff so there may be some reduction in the number of cases brought because there will be fewer people to investigate them due to the budget freeze or reduction. But the SEC enforcement division is in some ways like an emergency room. They have more patients than they would like, and they have to triage the cases that are coming in to determine which ones they’re going to work on. They tend to work on the most significant matters. In an environment where budgets are frozen or reduced, what happens is that some of the lower priority cases that might have been worked will be referred or will not be investigated.

MCC: What are the most important qualities you look for in the lawyers you hire for this kind of work?

Thomas: One of the things that we look for are people who believe in the work and believe that corporate whistleblowers are heroes. There are lots of areas of law where you can kind of be detached from your clients or the issues, but the representation of corporate whistleblowers is a very personal kind of work. Many corporate whistleblowers are unable to speak with others about the fact that they are a whistleblower. And it can be tricky. Another important aspect that we look for is subject matter expertise. We also look for people who play well with others, because our model is collaborative. We work closely with our clients, and we work closely with one another.

MCC: I’ve spent time with whistleblowers over the years, and they can be difficult individuals to deal with. They are often under enormous pressure within the company, and in their personal lives. I’m not trying to disparage whistleblowers, but I think you know what I’m talking about. They can be difficult individuals to collaborate with, to use your word. How have you found working with whistleblowers, and is this something that you take into consideration when you’re choosing lawyers?

Thomas: You know what’s interesting? The common characteristic is that they’re very smart. And the second quality that I have found is that corporate whistleblowers believe the company when the company says, “See something, say something.” And only when they do so and the company doesn’t appropriately address the problem or retaliates against them do they then choose to blow the whistle outside the organization. And there are some whistleblowers that can be difficult. And we don’t work with those folks, even if they’re right about a potential violation because it is such a long-term and intimate working relationship. And if we sense that it could be a difficult working relationship, we encourage them to find another attorney that might be a better fit for them.

MCC: Based on what you hear from your clients, what should a general counsel do to try to ensure that a whistleblower complaint doesn’t explode in his/her face (and on the front pages)?

Thomas: Over the years, I have found the most common reason that employees report corporate problems to law enforcement and regulatory authorities is that they raised the issue internally and perceive that they were retaliated against because of it. The second most common reason that people report externally is that they believe that the company has not appropriately handled the reported problem. As a result, I would encourage responsible organizations to pay closer attention to internal reporting – informal and formal tips – and to protect employees who report problems from retaliation. Surprisingly, many organizations don’t regularly follow-up with internal whistleblowers.



Jordan Thomas is the chair of the whistleblower representation practice at Labaton Sucharow LLP. He joined Labaton from the Securities and Exchange Commission where he served as an assistant director and, previously, as an assistant chief litigation counsel in the Enforcement Division. He had a leadership role in the development of the SEC Whistleblower Program. Prior to joining the SEC, he was a trial attorney at the U.S. Department of Justice, where he specialized in complex financial services litigation. He can be reached at