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Welcome to the Whistleblower Wiki

Zuckerman Law’s Whistleblower Law Wiki provides an overview of the major laws providing rewards or incentives for whistleblowing and laws that protect whistleblowers against retaliation. The wiki includes links to key statutes, regulations, legislative history, articles, and other sources of information.

Zuckerman Law maintains this resource to help inform whistleblowers about their rights and navigate the complex weave of federal and state whistleblower laws. Matt Stock and Jason Zuckerman encourage readers to inform them of any errors or suggested updates.

Information on this wiki is provided for informational purposes only and should not be construed as or relied upon as legal advice. This wiki may be deemed attorney advertising. If you are seeking advice concerning a whistleblower reward or whistleblower retaliation matter, contact experienced counsel. Matt Stock and Jason Zuckerman are responsible for the content on this wiki.

SEC Whistleblower Program

Under the SEC Whistleblower Program, the SEC will issue awards to whistleblowers who provide original information that leads to enforcement actions with total monetary sanctions (penalties, disgorgement, and interest) in excess of $1 million. In exchange for the valuable information, a whistleblower may receive an award of between 10% and 30% of the total monetary sanctions collected.

In determining an award percentage, the SEC considers the particular facts and circumstances of each case. For example, positive factors that may increase an award percentage include the significance of the information, the level of assistance provided by the whistleblower and the whistleblower’s attorney, and the law enforcement interests at stake. On the other hand, negative factors that may decrease an award percentage include unreasonable delay in reporting the violation to the SEC and the culpability or involvement of the whistleblower in the violation.

Under the SEC Whistleblower Reward Program, whistleblowers can submit tips anonymously to the SEC through an attorney and be eligible for an award for exposing any material violation of the federal securities laws.

Contents:

1. Overview
2. Awards History: SEC Whistleblower Program A Success
3. SEC Office of the Whistleblower
4. Securities Law Violations that Qualify for an SEC Whistleblower Award
5. Lessons Learned from SEC Whistleblower Award Determinations
6. Prevailing in a Retaliation Whistleblower Case With Prior Performance Problems
7. Submitting a Tip Anonymously to the SEC Office of the Whistleblower
8. 10-Step Summary of the SEC Whistleblower Process
9. Employment Protections Available for SEC Whistleblowers
10. Largest SEC Whistleblower Awards
11. International Schemes and SEC Enforcement Actions

CFTC Whistleblower Program

The CFTC Whistleblower Reward Program provides whistleblowers with a strong monetary incentive, as well as anti-retaliation protections, for reporting wrongdoing to the CFTC. This includes violations or fraud in connection with:

• Commodity futures
• Commodity options
• Swap trading markets
• Derivatives
• Foreign corrupt practices

Approximately 65% of whistleblower cases filed at the CFTC involved charges of commodities fraud, market manipulation schemes and spoofing. Whistleblower tips to CFTC have helped drive record-level enforcement activity.

Since 2014, the CFTC has issued more than $120 million in awards to whistleblowers. The largest CFTC whistleblower awards to date are $45 million, $30 million, and $10 million. Whistleblower disclosures have enabled the CFTC to recover nearly $1 billion.

Contents:

1. Overview
2. Violations that Qualify for a CFTC Whistleblower Award
3. Whistleblowers Will Continue to Drive Increased CFTC Enforcement Activity
4. Anonymous Whistleblowing to the CFTC
5. CFTC Whistleblower Awards
6. Protections Against Whistleblower Retaliation
7. CFTC Prohibits “Gag Clauses” in Confidentiality and Employment Agreements

False Claims Act

The False Claims Act authorizes whistleblowers, also known as qui tam “relators,” to bring suits on behalf of the United States against the false claimant and obtain a portion of the recovery, otherwise known as a relator share. The phrase “qui tam” is short for qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “who [qui] sues in this matter for the king as well as [tam] for himself.” U.S. ex rel. Bogina v. Medline Indus., Inc., 809 F.3d 365, 368 (7th Cir. 2016).

The False Claims Act also protects whistleblowers from retaliation.

The qui tam provisions of the False Claims Act have been enormously effective in enlisting private citizens to combat fraud against the government. Qui tam whistleblowers, also known as relators, have enabled the government to recover more than $60 billion. In fiscal year 2017 alone, qui tam actions brought by whistleblowers resulted in $3.4 billion in settlements and judgments, and the government paid $392 million in whistleblower awards to False Claims Act whistleblowers.

Contents:

1. Types of False Claims Prohibited by the False Claims Act
2. False Claims Act First-to-File Bar
3. Filing a False Claims Act Qui Tam Case Under Seal
4. False Claims Act Fraud Violations
5. Materiality and the False Claims Act
6. False Claims Act Statute of Limitations
7. False Claims Act Authorizes Treble Damages
8. Pleading Qui Tam False Claims Act Case in Detail
9. False Claims Act Public Disclosure Bar
10. Scienter Under the FCA Does Not Require Proof of Specific Intent
11. The False Claims Act Protects Whistleblowers from Retaliation

IRS Whistleblower Reward Program

The IRS estimates that the United States loses more than $450 billion per year to tax evasion. To combat tax fraud, Congress enacted legislation providing robust incentives for whistleblowers to report tax fraud. Under 26 USC § 7623(b), the IRS is required to issue an award to tax whistleblowers of 15% to 30% of proceeds collected from tax fraud or tax underpayments if:

• the whistleblower provides a tip that the IRS decides to take action on (a whistleblower cannot force the IRS to act on a tip);
• the amount in dispute (the tax underpayment, including interest and penalties) exceeds $2 million (if the taxpayer is an individual, his or her gross income must exceed $200,000 for at least one of the tax years in question); and
• the IRS collects tax underpayments resulting from the action (including any related actions).

In enacting the IRS whistleblower bounty legislation, Congress provided mandatory awards to tax whistleblowers for high-quality tips. Section 7623(b) suggests a focus on large-scale tax fraud in that Congress removed the previous cap of $10 million on IRS whistleblower awards. Thus, if a whistleblower meets the requirements above, the whistleblower may be able to receive a substantial payout.

On July 2, 2019, the Taxpayer First Act was signed into law. The law provides tax whistleblowers, among other things, significant protections against retaliation. Read more about the tax whistleblower protection law here.

Anti-Money Laundering Whistleblower Program

On January 1, 2021, Congress enacted the Anti-Money Laundering Act (AMLA), a comprehensive reform of anti-money laundering laws. Recognizing the success of whistleblower incentives in combatting fraud against the government, securities fraud, tax fraud, commodities fraud, and other types of fraud, Congress included in the AMLA a provision that incentivizes whistleblowers to report violations of the anti-money laundering laws to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Whistleblower Protection Laws

The Dodd-Frank Act, which created the SEC Whistleblower Program, prohibits retaliation against whistleblowers for raising concerns about potential securities law violations. Remedies for a prevailing whistleblower include reinstatement, double back pay, litigation costs, expert witness fees, and attorneys’ fees.

Retaliation for whistleblowing to the SEC is also proscribed by the whistleblower protection provision of the Sarbanes-Oxley Act (“SOX”). The remedies are similar to those under Dodd-Frank, but SOX also includes special damages, such as emotional distress, impairment of reputation, and other noneconomic harm resulting from retaliation. Click here for information about additional options to combat retaliation against SEC whistleblowers.

Contents:

1. Sarbanes-Oxley
2. Dodd-Frank Act
3. Differences between SOX and Dodd-Frank Acts
4. Section 1985 Haddle Remedy for Conspiracy to Interfere with Civil Rights of SEC Whistleblowers
5. RICO Prohibition Against SEC Whistleblower Retaliation
6. Whistleblower Retaliation Can Give Rise to Breach of Contract Claim
7. Defense Contractor Whistleblower Protection Act
8. Taxpayer First Act
9. Whistleblower Protection Act
10. Energy Reorganization Act
11. Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
12. Surface Transportation Assistance Act
13. Consumer Financial Protection Act
14. Federal Railroad Safety Act
15. National Transit Systems Security Act
16. Consumer Product Safety Improvement Act
17. Food Safety Modernizations Act
18. Criminal Antitrust Anti-Retaliation Act

Did you know ...

• Whistleblower awards range from between 10% and 30% of the money collected when the sanctions exceed $1 million.
• The SEC Whistleblower Program allows a whistleblower to submit a tip anonymously to the SEC if represented by an attorney.
• 75% of SEC whistleblower award recipients in FY 2021 raised their concerns internally to supervisors, compliance personnel, or through internal reporting channels before reporting to the SEC. Most whistleblowers can report directly to the SEC. Compliance personnel, internal auditors, and company officers must meet certain requirements before reporting to the SEC.
• Since the inception of the SEC Whistleblower Program, the SEC has received more than 52,400 whistleblower tips and awarded approximately $1.2 billion to 233 individuals.
• Providing information to the SEC in an ongoing investigation can qualify for an award. Of the whistleblowers who received awards in FY 2021, approximately 56% provided original information that caused staff to open an investigation or examination, and approximately 44% received awards because their original information significantly contributed to an already existing investigation or examination.
• A whistleblower can qualify for an award without being a current or former company insider. Whistleblowers can obtains awards for providing independent analysis of public information.
• From FY 2012 to FY 2021, the number of whistleblower tips submitted to the SEC has grown by approximately 300%.
• The SEC stands firm against so-called "gag clauses" in confidentiality, severance, and other employment-related agreements. This type of prohibition is critical to the success of any whistleblower program because companies often use overly broad confidentiality agreements to silence and punish whistleblowers. But whistleblowers should not disclose privileged information and should seek advice about lawful means of gathering evidence.
• In FY 2021, the most common violations reported by SOX whistleblowers were Manipulation (25%), Corporate Disclosures and Financials (16%), Offering Fraud (16%), Trading and Pricing (6%), and Initial Coin Offerings and Cryptocurrencies (6%).
• In FY 2021, SEC received tips from individuals in 99 foreign countries, as well as from every state in the United States and the District of Columbia. And approximately 20% of the whistleblowers that received awards in FY 2021 were based outside of the United States.