The first targets of the Securities and Exchange Commission's new whistleblower program may be lawyers representing issuers or securities firms in investigations, SEC enforcement director Robert Khuzami has suggested.
The debate during the development of the recently adopted program to reward persons who voluntarily provide original information that leads to a successful enforcement action largely focused on the potential impact on corporate compliance efforts.
But in a speech blasting what he called obstructive white-collar defense tactics, Khuzami said the whistleblower program, combined with the SEC's cooperation program, "only increases the chances that an insider with intimate knowledge of the wrongdoing may well emerge, and reveal the client's testimony to be implausible or worse."
Khuzami said he was concerned with lawyers' conduct in connection with internal probes as well as in defending SEC enforcement investigations.
Referring to feigned forgetfulness, incomplete
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