Sher Tremonte Prevails in D.C. Circuit Appeal Over $13.5 Million Whistleblower Award

On September 23, 2022, the D.C. Circuit affirmed an administrative order issued by the Securities and Exchange Commission (“SEC”) granting Sher Tremonte’s client, Michael Mittman, a $13.5 million whistleblower award under the Dodd-Frank Act.

Mittman and a former co-worker, Michael Johnston, provided the SEC with original information concerning misrepresentations by a large financial institution relating to two managed funds. The information led the SEC to initiate an enforcement action that resulted in a $180 million settlement. In 2021, the SEC determined that Mittman and Johnston were joint whistleblowers and awarded them 15% of the settlement ($27 million) to be divided between them equally.

Johnston challenged the SEC’s award, arguing that the SEC erred by dividing the award between him and Mittman and asking the D.C. Circuit to direct the SEC to grant him the entire amount of the award. Johnston asserted, among other things, that he alone discovered the original information that was presented to the SEC. Sher Tremonte intervened in the appeal on behalf of Mittman, filed a motion to dismiss, submitted a brief on the merits defending the SEC’s order, and participated in oral argument.

In an opinion authored by Judge Ginsburg, the D.C. Circuit partially granted Mittman’s motion to dismiss and rejected completely Johnston’s challenges to the award.

Sher Tremonte’s team included lawyers Justin M. Sher, Robert Knuts, Mark Cuccaro, Cathy Liu, and paralegal Ryan Pollock.

Read the full decision here. A Law360 article on the decision is available here.