Sunday Read: Getting to Know Whistleblower Attorneys: John McKnight
Just as the decision to come forward is not one made lightly, selecting a whistleblower lawyer should also inspire similar deliberation.
There are plenty of smart legal minds in practice today, but it is tantamount that whistleblowers hire a professional who has demonstrated a commitment to the highest ethical standards and a track record of success. Furthermore, though there are financial incentives involved, dedication, patience and strategic risk management are needed to reach a resolution — which in itself will likely take several years.
In this Sunday Read, National Whistleblower Center (NWC) kicks off a new feature that explores the qualities and motivations of some of the leading practitioners in the field.
Our first interviewee is John McKnight, a Partner at Sanford Heisler Sharp and a Co-Chair of the firm’s Whistleblower & Qui Tam Practice Group. McKnight has achieved several accomplishments that have made headlines and recovered billions of dollars. Key results include representing the former Executive Vice President and Chief Security Officer of Wells Fargo who assisted the Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), and Department of Justice (DOJ) in recovering $3.5 billion in fines and penalties arising out of the “fake account” scandal, which was resolved in 2020.
An Interview with John McKnight
NWC: John, what inspired you to enter whistleblower law?
John McKnight: My path to whistleblower law was different than most, because my dad [H. Vincent McKnight, Managing Partner of Sanford Heisler Sharp’s DC Office and Co-Ombudsperson] has been practicing in the area since I was in high school.
I hadn’t thought much about it until I started applying to law school. By then, my dad had started his own firm focusing exclusively on whistleblower cases. Once I started law school, I spent summers and breaks working for him part-time, and studying or working in other internships with the rest of my time. The more I learned about the area, the more I realized that there are bad actors in every industry, and I could build a practice seeking to hold companies accountable in any industry I was interested in.
What do you love about practicing whistleblower law?
I am very interested in financial markets, so keeping my finger on the pulse of what makes these markets tick is something I would probably do even if it wasn’t a part of my job. I really enjoy the interplay between how investors make their decisions and how the public at large is spending their time and money. Sometimes it makes all the sense in the world, and sometimes it makes no sense at all, and to me, that is the most fascinating part.
My job scratches that itch, because all of my cases give me a peek behind the curtain of what’s happening in the largest and most influential companies in the world and what these companies are doing to make the markets benefit them the most. Since I have clients at all levels of seniority, from a variety of different departments, I get to see organizational behavior and psychology from all of these different angles. I get to see how different companies approach the same problems, and at which point each of them crosses the line into illegal behavior.
What was your impression of the practice area when you first entered?
Like any new associate, I spent a lot of time in litigation and discovery to start my career. Dodd-Frank was only two years old by that point, so all of my cases came under the False Claims Act (FCA). In that sense, I thought whistleblower law was going to be pretty similar to just about every other area of law. I assumed most of the job would be focused in litigation and that most of the substance I would be dealing with on a day-to-day basis would be civil procedure and discovery.
How did that perception change?
That changed more as we started signing up new clients and I began getting more involved in the pre-intervention investigation part of newer FCA cases. In those cases, we still had to advocate for our clients, but we were also supporting active investigations and doing what we could to help drive them towards a positive resolution. Litigation would then be more of a background consideration that we would prepare for as the government was deciding whether it had enough evidence to intervene. It changed again after we started filing SEC submissions pursuant to the Dodd-Frank whistleblower program. Since those cases are not formal court filings from our standpoint, the practice focuses more heavily on selecting the right cases at the right time, and then supporting multi-agency investigations.
With the FCA, you always know that you have the option of litigation if you and DOJ Civil reach an impasse and they decline litigation, so you can fall back on that skill set and still hope to obtain a positive resolution. Under Dodd-Frank, the whistleblower doesn’t have a private right of action to prosecute securities fraud on their own without the government, so picking the right cases matters much more. You want to have a vision for what a healthy stock market looks like, an idea of which industries and companies are garnering the most attention, where the market is going in the near future, and what problems are likely to result from that.
There are real consequences, sometimes worldwide, from securities fraud, so if you have thought all of this through then you’re going to be handing the government information that almost has to be on their radar. I would say this has been my favorite stage in the practice so far.
What are the top qualities potential claimants should seek in their whistleblower lawyer or firm?
These cases take a long time, so I think trust and chemistry are very important. You want to find someone who is connecting with you and your case.
Experience is important too, because you want to know that the person you hire is going to be able to put the information into the right person’s hands and have enough sway to influence decisions, but you also don’t want your case to just be a number on a list.
You want someone who listens to you and believes in your case, because even if they aren’t experienced in your particular industry or don’t have a decade of experience working in the government, a lawyer who listens to you and believes in your case will become an expert in whatever field your case requires and fight harder for your case just because they care about you.
Can whistleblower lawyers specialize in a particular area?
Yes, many whistleblower attorneys have sub-specialties, so it will often be easier to connect with an attorney who is familiar with the industry or company that you’re blowing the whistle on. For example, a client seeking to blow the whistle on a financial institution is probably going to have an easier time making a connection with a whistleblower attorney with some kind of experience or interest in banking. Likewise, a software engineer blowing the whistle on their former employer will probably form a better bond with an attorney who is tapped into Silicon Valley. Ultimately it is all about choosing someone who you feel you can trust who also understands the problems you’re hoping to solve.
What are the most common reasons whistleblowers come forward?
One of the most common reasons whistleblowers come forward is retaliation on the job. Many whistleblowers recognize that perhaps some part of their work revolves around something that could be legally problematic, but as long as their supervisors give them assurances and the work environment remains positive and friendly, they are happy to play along, continue to do a productive job, and maintain their friendships at the office.
Like I mentioned earlier, most frauds don’t seem blatantly illegal on their face when you’re only responsible for a small segment of the scheme and your supervisor assures you that everything is okay. Accounting fraud can look like data entry to an employee who doesn’t know why he is moving numbers from the column where they have always been into a new, seemingly unrelated spreadsheet. Often the problems start to arise when employees start receiving negative attention for reporting a problem they thought they were hired to resolve. This is when we start to see companies manufacture rules violations and generate pretext for termination. The whistleblowers then come to our office seeking to protect their reputation and tell the truth about what happened.
Other times, clients figure out more quickly that they are being asked to break the law and object more forcefully. This is often the face with more senior-level clients, because they often have access to enough context to understand a fraudulent scheme from a higher level. Clients that have this understanding of the circumstances are more likely to understand just how illegal a scheme is. They don’t want to be involved in illegal activity, they have a hard time looking the other way, and they don’t want to be turned into scapegoats when things eventually go wrong.
Ultimately, these are people who just want to earn a paycheck for an honest day’s work, just like all the rest of us.
In what professions or sectors are you seeing the most whistleblower activity?
The tech industry has been the single largest source of cases for us over the past few years by a pretty wide margin. This includes crypto, fin-tech, online advertising, and a host of other areas, all of which generally seek to leverage software and other emerging technologies to sell new products and services. The “fake it till you make it” culture that pervades Silicon Valley is one of the biggest problems facing the stock market today, and there doesn’t seem to be any shortage of companies selling investors on products they can’t actually produce.
Sophisticated and amateur investors alike have no idea what they are investing in, because companies and executives frequently lie about what their products are capable of, how they are spending their money, and what laws they are knowingly violating to amass the scale they need to obtain greater investment income and/or go public. While these aren’t necessarily new problems, they are taking place in the context of a society that can’t learn the possibilities and limits of computer-based technologies as quickly as the tech industry can release new products. This exacerbates the problem well beyond what it was in prior generations when emerging technologies were a little more tangible.
We’re also seeing more and more international whistleblowers. Dodd-Frank’s whistleblower program isn’t limited to US citizens or residents. As long as the defendant corporation is within the jurisdiction of the SEC, the whistleblower can be a citizen or resident of any country, so we have been fielding more and more calls from international whistleblowers who work for or with publicly traded US companies.
I was hoping you could leave us with parting thoughts that harkening back to the chemistry you mentioned that is needed between a lawyer and client.
I enjoy getting to help and learn from clients who experience all of this at the ground level, person-to-person. It’s one thing to see patterns and try to make sense of them at a high level. It’s another to help a client navigate their way through them in their day-to-day existences.
One of the things that is most interesting to me is just how normal fraudulent schemes can look on a day-to-day basis. Of course, sometimes it is blatant and obvious, but often without context from a lawyer, fraud can just look like people completing seemingly trivial projects that follow their bosses’ orders.
The process of listening to my clients and matching up their experiences to the legal standards I work with is one of the best parts of the job. I get to work with brilliant professionals from all industries who teach me something new every day.
Strong Deliberations
The decision to come forward is not one to be taken lightly, nor should selecting a whistleblower lawyer. NWC provides resources that can connect you with the right legal professional.
You can also learn more about the type of whistleblower lawyer needed for your claim in Rules for Whistleblowers: A Handbook for Doing What’s Right, which was authored by NWC Founder and Chairman of the Board Stephen M. Kohn.
Support NWC
NWC fights to bolster whistleblower programs, inform the public and employees in all sectors about available laws and protections, and help connect them with the right legal representation. As a 501(c)(3) non-profit our awareness building work is made possible with the support of our generous donors. Please consider donating $50 today to help us continue to educate the public on how they can impact everyone’s lives.
This story was written by Justin Smulison, a professional writer, podcaster, and event host based in New York.
