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Whistleblower Gets Over $30 Million

whistleblower awards

whistleblower awardsDid you know whistleblowers get between 10 and 30 percent of the amount the government collects from securities law violators?  Now more than ever, it can pay big to be a whistleblower.

Last year, a whistleblower was awarded more than $30 million for assistance and information that exposed and ended a massive securities fraud. The client was represented by Phillips & Cohen. To date, that is the largest SEC award ever made.

According to attorney Erika A. Kelton “The SEC acted quickly as a result of the information and assistance our client provided. The fraud was such that it’s unlikely that it ever would have been detected if our client hadn’t come forward.”

Recently, another whistleblower represented by Phillips & Cohen was awarded more than $3 million by the Securities and Exchange Commission (SEC).  The whistleblower provided assistance and information that led to a significant enforcement action.

This is the second largest award the SEC has made to a client of Phillips & Cohen in the past 10 months.

The whistleblowers in both cases chose to remain anonymous in order to protect their careers and their jobs. Confidentiality is highly important. The Dodd-Frank Act makes sure the SEC doesn’t disclose any information that would tie whistleblowers to particular actions taken against individuals or companies.

Dodd-Frank encourages everyday private citizens to report any wrongdoing to the SEC in exchange for anonymity, rewards and job protection.

If you need to report wrongdoing, contact a whistleblower attorney to find out your legal rights and help you through the process.

 

Game Changer for Whistleblowers

False Claims Act | SEC Whistleblower Claim

It looks like there has never been a better time to be a whistleblower. This is especially true for public companies or within the securities industry.

In 2010 the Securities & Exchange Commission’s (SEC) established a whistleblower awards program.  As a result, whistleblowers now have unprecedented financial incentives to disclose potential misconduct to the government.  Also, they are enjoying extraordinary legal protection for doing so.

Nowadays even compliance personnel, the employees tasked with identifying internal misconduct within a company, are receiving substantial payouts for reporting their own companies in some instances.

However, if you are the company being faced with a whistleblower, the situation has never been more difficult. The companies face several problems. One is the legal minefield when trying to deal with reports of misconduct. Another is the consequence of increased financial incentives for the whistleblowers to report actual or perceived misconduct. On top of it all, the companies are dealing with all this under an extremely tight reporting timeline.

Before Financial Incentives, Whistleblowers Were Scared To Speak Out

Before the awards program was established in 2010, whistleblowers had very little incentive to speak out.  Quite the opposite. They had incentive to stay quiet in order to avoid retaliation.

In 2002, the Sarbanes-Oxley Act of 2002 went into effect and whistleblowers were protected against retaliation. However, this provision was not only weak, it was often ineffective.

Paradigm Shift In 2010

The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 changed everything for whistleblowers. This was the first time whistleblowers were offered a financial reward for whistleblowing relating to securities violations.

Million Dollar Settlements

Dodd-Frank directed the Commission to pay eligible individuals when the original information they provided lead to SEC and other enforcement actions to a monetary sanction over $1,000,000.  What does that mean for the whistleblower? With awards ranging from 10 to 30 percent of the total amount of money collected in a case, it means a lot!

Non-US Awards

The Commission determined that whistleblower awards need not be limited to those in the United States. Four of the 17 whistleblower awards to date were to whistleblowers living in foreign countries.

Penalties for Retaliation

Beyond the Sarbanes-Oxley Act of 2002, Dodd-Frank broadly prohibited retaliation against whistleblowers who report possible wrongdoing.

Thanks to the stringent protection and the financial incentives, 17 whistleblowers have received awards under Dodd-Frank, paying out nearly $50 million. The number of whistleblowers continues to rise.  The first quarter of 2015 saw a 20 percent increase in the number of whistleblower tips over the same quarter last year.

What companies subject to the SEC’s oversight should be concerned about:

  • The SEC has expressed intense interest in retaliation cases.
  • The SEC has recently granted awards to a company’s own compliance officers.
  • The SEC has voices a serious concern about the use of confidentiality agreements that may suppress SEC whistleblowers.

 

If you are a whistleblower or are considering being a whistleblower, contact a specialized whistleblower attorney as soon as possible.