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Avenatti arrest fallout: don’t confuse whistleblowing with extortion

Joe Mont | March 25, 2019

Monday was a very bad day for whistleblowers.

For several years, thanks in large part to protections and benefits created by the Dodd-Frank Act, aggrieved employees at public companies have had a voice.

They can even monetarily benefit by escalating their regulatory and ethical concerns beyond HQ walls. The Securities and Exchange Commission is authorized by Congress to provide cash awards to eligible individuals who come forward with high-quality original information that leads to an enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10 percent and 30 percent of the money collected.

It may not be a perfect system, but the bounty program and strikes against whistleblower retaliation (and “pretaliation”) have been wildly successful. Now, however, whistleblowers have suffered a grievous injury.

Michael Avenatti, the attorney who represented adult film star Stormy Daniels in her battle against a President...

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