Labaton Sucharow represented the plaintiffs in a combined whistleblower settlement that is the largest in the Securities and Exchange Commission’s (SEC) history. On March 19, the SEC awarded a group of whistleblowers more than $83 million in connection with their assistance on a landmark enforcement action that resulted in Merrill Lynch paying $415 million to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer assets. The SEC announced that these are the largest awards since its Whistleblower Program was established seven years ago.

The whistleblowers tipped the SEC to long-running misconduct at Merrill Lynch, which over numerous years, executed complex options trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account. Through the reckless conduct, Merrill Lynch violated the SEC’s Customer Protection Rules and put billions of dollars of customer funds at risk in order to finance its own trading activities.

”This historic award is a wake-up call for Wall Street,” remarked Jordan A. Thomas, Chair of the Whistleblower Representation Practice at Labaton Sucharow. “With its protections, incentives and the ability to report anonymously, the SEC’s program empowers every citizen to be its eyes and ears. Mark my word, this is only the beginning of a revolution in ethical action for Corporate America. Bad actors are on notice.”

The full award was granted to two whistleblowers sharing nearly $50 million and the third whistleblower received more than $33 million. The previous high was a $30 million award in 2014.Thomas joined Labaton Sucharow from the SEC where he served as an Assistant Director and, previously, as an Assistant Chief Litigation Counsel in the Division of Enforcement.

Labaton Sucharow was listed in the 2017 edition of New York’s Personal Injury Lawyers.