Remember the old phrase you yelled at your siblings when one of them did something they weren’t supposed to do? I’m telling! Was there a benefit from telling Mom and Dad about the indiscretions of your sibling or were you stuck with the title of tattletale?
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new legislation protects whistleblowers who report violations of the securities laws to the SEC. The whistleblower could receive 10% to 30% of the total amount of monetary penalties collected in sanctions that exceed $1,000,000. Why is this important? The new legislation expands the coverage to include violations of the Foreign Corrupt Practices Act.
With increased enforcement actions, the recent trend of imposing higher fines and the poor economy, the financial incentive could draw out more whistleblowers. From this pool, we might find some who are interested in doing the right thing, some who are only in it for the money and a few disgruntled people who want to get even with former employers.
Let’s take a look at some potential awards. A recovery for the lowest penalty of $1,000,000 would result in a payment to the whistleblower of $100,000 to $300,000. On the other end of the spectrum, we find the largest FCPA penalty of $800 million imposed in 2008. If an individual had been responsible for reporting that violation, he or she might have received $80,000,000 to $240,000,000. Would a payment of $100,000 be worth becoming a whistleblower? How about $80,000,000? Your parents may not have given you anything for tattling on your siblings, but the federal government appears to be willing to provide some rewards for tattletales.
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new legislation protects whistleblowers who report violations of the securities laws to the SEC. The whistleblower could receive 10% to 30% of the total amount of monetary penalties collected in sanctions that exceed $1,000,000. Why is this important? The new legislation expands the coverage to include violations of the Foreign Corrupt Practices Act.
With increased enforcement actions, the recent trend of imposing higher fines and the poor economy, the financial incentive could draw out more whistleblowers. From this pool, we might find some who are interested in doing the right thing, some who are only in it for the money and a few disgruntled people who want to get even with former employers.
Let’s take a look at some potential awards. A recovery for the lowest penalty of $1,000,000 would result in a payment to the whistleblower of $100,000 to $300,000. On the other end of the spectrum, we find the largest FCPA penalty of $800 million imposed in 2008. If an individual had been responsible for reporting that violation, he or she might have received $80,000,000 to $240,000,000. Would a payment of $100,000 be worth becoming a whistleblower? How about $80,000,000? Your parents may not have given you anything for tattling on your siblings, but the federal government appears to be willing to provide some rewards for tattletales.
The Dodd-Frank legislation is one of many federal statutes that have been passed to protect whistleblowers for reporting various types of violations such as those related to the environment and employment laws. Click HERE for a list of whistleblower protections.
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