Matthew Stock, J.D., CFE, CPA, is the director of the Whistleblower Rewards Practice at Zuckerman Law. At Zuckerman Law, he leverages his experience as an attorney and external auditor to assist whistleblowers to investigate and disclose complex financial frauds to the government. His practice focuses on representing whistleblowers in reward cases before the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Service (IRS).
How did you become passionate about fighting fraud?
I first became passionate about fighting fraud after witnessing the fallout from the major accounting scandals in the early 2000s (Enron, WorldCom, Tyco and Global Crossing). I decided early on to focus my education and experience on accounting and fraud detection, which led to a position as an external auditor at a Big 4 accounting firm. My passion for fighting fraud was further emboldened after the collapse of Bernie Madoff’s Ponzi scheme and the financial crisis that cost the U.S. approximately $20 trillion. I was frustrated to learn that many of these scandals could have been detected and halted years prior to their ultimate collapses if the companies or government agencies had acted on whistleblowers’ disclosures. This prompted me to work at a whistleblower law firm after graduating from law school.
Whistleblower reward programs have proven to be a very effective tool in fighting fraud. Since the inception of the SEC whistleblower program, enforcement matters brought using information from whistleblowers have resulted in orders for nearly $5 billion in total monetary sanctions and the return of more than $1.3 billion to harmed investors. Similarly, whistleblower complaints brought under the False Claims Act have enabled the government to recover more than $64 billion.
What are some of the biggest challenges you face in working with whistleblowers and whistleblowing cases?
My practice focuses on representing whistleblowers in reward cases before the SEC, CFTC and IRS. Under these whistleblower programs, whistleblowers are eligible to receive up to 30% of the government’s collected monetary sanctions in a successful enforcement action as a reward. The path to obtaining a whistleblower reward is lengthy and complex, and each whistleblower program has unique rules and procedures.
While there are countless challenges and issues when reporting to the government, I frequently assist whistleblowers with the following issues:
Reporting anonymously: Determining whether a whistleblower can submit tips anonymously to the government and be eligible for an award (e.g., the SEC and CFTC whistleblower programs allow whistleblowers to submit tips anonymously if represented by counsel and be eligible for an award, whereas the IRS whistleblower program does not allow whistleblowers who report anonymously to be eligible for an award).
Eligibility for a reward: Determining whether a whistleblower must take certain steps before reporting to the government to be eligible for an award (e.g., the SEC whistleblower program has different eligibility rules for auditors based on their relation to the company and how they obtained the information).
Maximizing a reward: Determining whether a whistleblower should take (or avoid taking) certain actions that could increase or decrease the size of their future reward and identifying potential “related action” awards.
Information and evidence: Determining the information and evidence to include (or exclude) from a submission to the government (e.g., the government does not want information that may violate the company’s attorney-client privilege, such as emails that involve advice from inside or outside counsel).
Whistleblower protections: Determining which laws protect a whistleblower’s particular disclosure (both internal and external) and if the whistleblower suffers retaliation, devising a strategy to maximize their recovery and protect their career.
I could write a short book on this section alone but, in summary, there are endless issues and challenges that whistleblowers face when reporting to the government.
Do you have any advice for people who are considering blowing the whistle?
I strongly suggest that they consult with an experienced attorney before blowing the whistle. At a minimum, a prospective whistleblower should be aware of the federal and state whistleblower reward and protection laws that could potentially apply to their whistleblowing and develop an effective strategy to protect their interests and achieve their objectives. Whistleblowers should get sound advice about the potential risks of stepping forward and make sure that they do not take any actions that could undermine their potential whistleblower reward or retaliation claims — or result in potential liability. Many people are surprised to learn that not all forms of whistleblowing are protected, and certain actions by the whistleblower could expose them to significant civil or even criminal liability (e.g., disclosing a suspicious activity report).
What is a memorable case or project that you have worked on?
I cannot provide specific details about my cases due to their confidential nature, however, I will say that I have had the privilege of representing many courageous whistleblowers whose information played a critical role in the government’s ability to halt large Ponzi schemes, investment scams, tax fraud and significant violations at publicly traded companies. Many of these successful enforcement actions returned significant funds to harmed investors. My proudest moments are when I have the opportunity to tell my clients about the tremendous impact of their whistleblowing and to inform them that they will be receiving a reward.
How do you think the CFE credential has helped your career?
In my experience, most whistleblowers appreciate an attorney who can both navigate the legal process as well as understand and investigate the complex frauds that they are seeking to report. The CFE credential has strengthened my ability to collaborate with clients to perform in-depth investigations to uncover fraud and my legal training enables me to distill the facts into a cogent submission that provides a roadmap for a successful enforcement action. The CFE credential has been especially helpful as I work with the talented attorneys and accountants at the SEC, CFTC and IRS to assist them in investigating fraud schemes, protecting investors and holding fraudsters accountable.
ACFE membership is open to individuals of all job functions, industries and levels of experience who are interested in the prevention, detection and deterrence of fraud. If you want to level up your anti-fraud career, we can help.
Learn more SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners