Our Unique Experience with Whistleblower Claims in the Banking and Tech Industry
The Whistleblower and Qui Tam Practice Group has deep industry experience with cutting edge cases in the technology and banking industries. We use a client-centered approach, representing executive-level clients in intricate legal matters such as Bank Secrecy Act violations, money laundering violations, digital ad fraud, banking misconduct, and data privacy threats. These cases demand sophisticated analysis and often require filings with multiple agencies to maximize the likelihood of successful enforcement. As technology evolves, opportunities for fraud and unfair advantage proliferate, making the role of courageous whistleblowers essential in exposing and combating these schemes.
Whistleblower Cases: Dodd-Frank Whistleblower Program and Its Importance
The Dodd-Frank Whistleblower Program incentivizes individuals to come forward with information regarding federal securities or commodities law violations. Defendant companies must fall under the purview of the Securities and Exchange Commission (“SEC”) or the Commodity Futures Trading Commission (“CFTC”). For instance, all publicly traded companies in the United States—as well as other select companies receiving substantial American investment income—are required to file statements and disclosures with the SEC.
The Importance of Dodd-Frank Whistleblower Program
The Dodd-Frank Whistleblower Program was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 in response to the excessive financial risk-taking that caused the Great Recession of 2008. Information provided by a whistleblower that leads to civil penalties totaling more than $1 million makes the whistleblower eligible for an award of between 10% and 30% of the penalties and related actions under other eligible whistleblower programs. The SEC and CFTC count on whistleblowers to expose and punish the kind of financial wrongdoing that plunged the economy into crisis in 2008.
Our Ongoing Support of Whistleblowers with SEC Claims
Typically, a publicly traded company that deliberately withholds, omits, or misstates information to investors that would otherwise negatively impact the company’s value is subject to an SEC fraud investigation. The SEC does not require criminal intent to initiate an investigation based on a whistleblower’s inside information, as long as the information the whistleblower possesses can show demonstrable intent by the company to deceive investors or commit fraud. Other types of cases that come under the SEC’s purview include deficient cybersecurity practices, banking fraud, and crypto fraud.
Whistleblower Cases: The False Claims Act and Its Importance
The False Claims Act (FCA) is enforced by the Department of Justice (DOJ). It empowers a private citizen (called a “relator”) to bring a whistleblower claim (or “qui tam”) lawsuit against an individual or organization for defrauding a U.S. governmental entity. Typical violations can include Defense Department contractor fraud, customs fraud, or Medicaid fraud. Relators who successfully help the government expose such white-collar crime save the U.S. government billions of taxpayer dollars annually and are eligible to receive 15% to 30% of the money collected as a result of a settlement or penalties levied against the defendant.
A whistleblower or “relator” bringing a claim under the FCA must voluntarily disclose to the government that an individual or corporation is violating the law and must be an original source of that information.
Under the False Claims Act, anyone can file a qui tam case, including U.S. Citizens, non-U.S. citizens, employees, and third parties. However, the relator must be represented by an attorney in filing their claim.
The Importance of FCA Whistleblower Claims
Without whistleblowers bravely coming forward with inside information, corporations would commit fraud with impunity. That is why whistleblowers play a crucial role as private stewards of the public trust— and why they deserve to be compensated when their tips lead to successful settlements and penalties levied by the Government against bad actors.
When an individual discovers fraudulent practices, navigating an FCA claim can be intimidating, overwhelming, and isolating. Our attorneys have established relationships with various agencies of the U.S. government – including the Department of Justice – and stand beside relators with guidance and support in all aspects of their claim from start to finish.
Our Experience Representing Whistleblowers in FCA Claims
We have successfully represented numerous qui tam plaintiffs who used their insight to blow the whistle on fraud. Examples of past successful actions include a former contract director at Navistar Defense and Navistar International who blew the whistle on the fact that Navistar was forging invoices, catalogue prices, and other data during the negotiations of a multi-billion-dollar Department of Defense contract to manufacture mine-resistant, armored vehicles being sent to Iraq and Afghanistan. Because of our clients’ inside information, Navistar agreed to pay the U.S. government $50 million.
Protecting and Representing Relators and Whistleblowers from Retaliation
It is unlawful for an employer to retaliate against an employee who blows the whistle on fraud and other wrongdoing, whether via termination, harassment, constructive discharge, demotion, retaliatory investigations, or reduced hours. There are numerous state and federal laws that protect whistleblowers from being penalized for shedding light on unlawful activity by their companies. Private sector employees are protected from retaliation prohibited by various state and federal statutes including the anti-retaliation provision of the False Claims Act, 31 U.S.C. § 3730(h), Dodd-Frank’s anti-retaliation provision, and the Sarbanes-Oxley Act.
As a law firm founded to defend employment rights, we bring decades of experience successfully representing employees of all kinds from unlawful workplace retaliation. We have significant experience protecting whistleblowers in the important work they do exposing the corruption they see firsthand.
International Whistleblowers and Applicable Whistleblower Laws for Companies with Global Operations
Our international whistleblower practice stands out among U.S. law firms for its exceptional diversity. With attorneys fluent in Mandarin, Korean, French, Spanish, and Hindi, we provide expert advocacy for whistleblowers from a wide range of cultural and linguistic backgrounds.
We also take pride in our partnerships with international law firms, including SAATH Law, an India-based law firm specializing in international whistleblower cases at the intersection of Indian and U.S. legal systems. With strong connections to both Indian and American regulatory authorities, SAATH represents whistleblowers from India who may qualify for rewards under applicable whistleblower programs in both the U.S. and India.
Whistleblowers do not have to be an American citizen or live in the United States to qualify for an award under several American whistleblower laws, including the Foreign Corrupt Practices Act and the Anti-Money Laundering and Sanctions Programs. Often, U.S. jurisdiction over the defendant company is sufficient to advance a whistleblower tip for a reward should an enforcement action occur.
FCA Claims and Relator Qualifications
The False Claims Act covers defendant companies and their agents who are accused of defrauding a U.S. governmental entity including companies with operations overseas. A common area for international whistleblowers to report wrongdoing under the FCA is customs fraud, in which foreign exporters violate the law by failing to pay customs duties required under the nation’s import tariff regulations, either through the intentional misclassification of goods, the failure to declare the true value of goods, or the failure to mark goods with their country of origin. Whistleblowers are eligible for an award of 15-25% of the recovery the U.S. government secures in False Claims Act cases.
SEC Claims and Relator Qualifications
You do not have to be a U.S. resident or citizen to participate in the whistleblower programs of the Securities and Exchange Commission (“SEC”) or Commodity Futures Trading Commission (“CFTC”). The key requirement of an SEC or CFTC claim is that one or the other government agency has authority over the company alleged to have committed securities or commodities fraud. This applies to all publicly traded companies in the U.S. and certain other companies receiving substantial American investment income.
Information provided by an international whistleblower that leads to civil penalties totaling more than $1 million makes the whistleblower eligible for an award of between 10% and 30% of penalties.
Foreign Corrupt Practices Act of 1977 and Relator Qualifications (FCPA)
The Foreign Corrupt Practices Act (“FCPA”) is an anti-bribery law, jointly enforced by the SEC and DOJ. The law is used to prosecute bribes paid abroad by companies that are directly or indirectly connected to the U.S. Whistleblowers reporting FCPA violations are eligible for rewards if the SEC issues penalties based on original information provided by the relator.
Entities that fall under the FCPA include:
- Issuers: Issuers are U.S. or foreign public companies listed on the stock exchange, companies that file periodic reports with the SEC, as well as foreign subsidiaries and agents of publicly listed corporations
- Domestic Concerns: Domestic concerns are entities that do not qualify as issuers but which are based in the U.S. generally through residence, incorporation, or employment.
- Non-issuer Companies: Foreign individuals and non-issuer companies can be accountable for corrupt actions in the U.S.
Whistleblowers reporting FCPA violations are eligible for rewards under the Dodd-Frank SEC Whistleblower Program if the SEC issues civil penalties based on the information the whistleblower provided.
Anti-Money Laundering Whistleblower Program and Relator Qualifications (“AML”)
The Anti-Money Laundering (“AML”) Whistleblower Program enables whistleblowers to report money-laundering violations and sanctions evasions to the Treasury Department.
Whistleblowers are not required to be “insiders” and can be eligible for an award based on their independent knowledge or assessment of publicly available information, provided the government is not already aware of the information. AML claims could involve fraud occurring overseas, but it is not a requirement.
The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) are bodies within the Treasury Department. FinCEN investigates violations of the Bank Secrecy Act, while OFAC enforces and investigates sanctions violations subject to a variety of laws. Information submitted to either agency that leads to an enforcement action totaling more than $1 million makes the whistleblower eligible for an award of 10% to 30% under the AML Whistleblower Program.
Experienced Guidance and Advocacy from the Attorneys at Sanford Heisler Sharp McKnight
The attorneys at Sanford Heisler Sharp McKnight take a client-centered approach to representing clients in their legal matters with cutting-edge strategies and experienced insight. If you need guidance and representation with your domestic or international whistleblower claim, please fill out the contact form below which will be reviewed, evaluated, and responded to quickly.
