Today, the U.S. Department of Justice (SEC) announced the agency’s new whistleblower rewards program. The program establishes rewards of up to 30 percent of the first $100 million in company forfeitures and 5 percent on additional proceeds up to $500 million.
Statement of Erika Kelton, partner at Phillips & Cohen, an international whistleblower law firm:
“The Department of Justice’s new whistleblower program is a game changer in the war against foreign corruption and financial fraud –crimes that too often hide in the shadows.
However, I question the wisdom of creating a program that effectively caps the whistleblower awards. Whistleblowers take enormous risks stepping forward, particularly in reporting the kind of wrongdoing targeted by DOJ’s new program. Whistleblowers in corruption, money laundering, and similar cases not only risk their jobs, but they can also risk their and their families’ lives and well-being. By limiting the amount of an award, individuals may choose to stay silent, particularly because the larger the recovery may also increase the risks.
Whistleblowers with information about massive frauds should be the people DOJ wants to attract. By putting limits on their recovery they risk losing them as whistleblowers. Moreover, the income of CEOs of companies that are perpetrating massive schemes have never been limited, so it is puzzling that the Justice Department would want to place limits on awards to those who exposed grave wrongdoing. It is the whistleblowers that are the true heroes.”
Statement of Sam Brown, partner at Phillips & Cohen, an international whistleblower law firm:
“Whistleblowers take huge risks when reporting fraud and potential whistleblowers around the world pay attention when substantial awards are announced. A large payment invariably causes whistleblower tips to skyrocket. While such payments are rare, they play a singular role in keeping the program in the public consciousness, and the Department of Justice is shooting itself in the foot by limiting rewards, especially when the fraud can be financially enormous.”
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Phillips & Cohen is the most successful law firm representing whistleblowers, with recoveries from cases totaling over $13 billion and 22 awards for clients under Dodd-Frank whistleblower reward programs.