What Disclosures Qualify For A Whistleblower Reward?
Under specific U.S. laws, both citizens and foreign nationals can qualify for financial rewards as whistleblowers if they disclose violations that result in the U.S. obtaining sanctions from the wrongdoer.
To qualify for a financial reward, you must follow strict procedures set forth under each act. The failure to follow these procedures can result in denial of an award even if your information results in a substantial sanction obtained by the government. The New Whistleblower’s Handbook outlines the process for each of the significant reward laws.
Can I Remain Confidential And Anonymous When I Apply For Whistleblower Reward?
The Securities Exchange Act, the Commodities Exchange Act, and the Auto Safety Act each explicitly provide for anonymous filings. Under each of these laws, you must be represented by a licensed attorney to file your claim anonymously. To remain anonymously, the attorney applies on your behalf.
Under IRS whistleblower law, you can’t file anonymously, but the IRS has stringent rules protecting the confidentiality of whistleblowers. In practice, the IRS rules have proven to be as effective as the anonymity rules. However, to file an IRS claim, you must personally sign the form under oath.
The False Claims Act permits whistleblowers to file a lawsuit under seal. The whistleblower’s identity is only known to the court and the U.S. government while the case is under seal. By court order, the whistleblower complaints and the whistleblower’s identity must remain confidential until the U.S. district court orders otherwise. Furthermore, initially, the complaint is not served on the defendant.
These provisions permit the government to initiate a confidential investigation. Once the government concludes its investigation or once the court lifts the seal, the whistleblower’s complaint typically become a matter of public record. In most cases, the defendants eventually learn the whistleblower’s identity. There are no firm rules governing confidentiality under the APPS, the Lacey Act, or the Endangered Species Act. Whistleblowers who utilize these laws should request confidential informant status.
The whistleblower reward laws have been remarkably successful, and they are now the best laws protecting and compensating whistleblowers.
From 1986 to 2019, the False Claims Act paid whistleblowers $7 billion in rewards. In 2018, the IRS paid over $312 million in rewards to whistleblowers. The Securities Exchange Commission (SEC), since the inception of their program, has paid whistleblowers over $450 million. And from 2014 to 2018, the CFTC whistleblower program collected over $87 million from wrongdoers.
The False Claims Act, IRS Whistleblower Program, Commodity Exchange Act, Securities Exchange Act, Auto Safety Act, and the Foreign Corrupt Practices Act all require the government to pay a minimum reward to the whistleblower of between 10% – 15%. Under some of these laws, the reward can be as much as 30% of the collected proceeds. The failure of the U.S. government to honor these rewards is subject to judicial review.
30 rules on Whistleblower, Qui Tam, and Whistleblower Rewards Law. Special Pro Bono Resource Contains the Key Statutes and Judicial Decisions Cited in The New Whistleblower’s Handbook. Read The Rules
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