Jordan A. Thomas, who spent the past eight years "as an Assistant Director and Assistant Chief Litigation Counsel in the SEC's Division of Enforcement," and who "notably... played a leadership role in the development and implementation of the SEC's Whistleblower Program, which was enacted by the Dodd-Frank Act in July 2010, with the related implementing rules becoming effective this August" is joining the securities class-action law firm Labaton Sucharow LLP to launch its "Whistleblower Representation Practice," the firm announced.
The release helpfully notes that "the statute provides whistleblowers with enhanced anti-retaliation protections and substantial financial incentives, between 10-30% of the monetary sanctions collected, for providing original information to the SEC about violations of the federal securities laws." The chairman of the firm, Lawrence A. Sucharow, is quoted in the release referring to Mr. Jordan's "unique insight into the SEC's whistleblower program."
This is the way it works all too often — a regulator writes the rules or sets up a program, then leaves for the private sector to make money helping individuals or companies make money by navigating the complexities of the same rules. It's private-sector job creation, Obama-style. As I've said in the past, I think government employees should be free to leave for the private sector if they want to, and the laws are so complex that one can't blame individuals for wanting to hire former government officials to navigate them. But there's nevertheless something troubling about the whole thing. It doesn't exactly create incentives for simple or impartial regulation. If these whistleblower rules were simple and enforced impartially, what'd be the advantage to paying a former SEC lawyer to help navigate them?
Bloomberg News reported this story with no mention that anything might be troubling about it.