Whistleblower Protection

It is no secret that whistleblower complaints are on the rise. According to the SEC Office of the Whistleblower’s (OWB) recently released annual report, during the 2013 fiscal year, OWB received more than 3,200 whistleblower complaints, tips, and referrals—up from 3,001 in 2012 and just 334 in 2011 (the year OWB was created). Similarly, in fiscal year 2013, DOJ saw a record 752 qui tam complaints filed under the False Claims Act (FCA) whistleblower provision. Whistleblower awards are also on the rise. In fiscal year 2013, the DOJ recovered $3.8 billion in settlements and judgments based on the FCA. More than three quarters of the DOJ’s recovery—$2.9 billion—was related to whistleblower lawsuits, with whistleblowers receiving $345 million of the recovery. In September 2013, the SEC OWB paid more than $14 million to a single whistleblower. The SEC OWB also recently announced that it paid an additional $150,000 to the recipient of the first whistleblower award, for a total of more than $200,000. But not all whistleblowers receive large payouts, and many face retaliation for their actions. A recent Fourth Circuit decision makes the relatively light burden of proving retaliation more difficult. And an upcoming decision by the Second Circuit could affirm the lower court’s limitations on who can recover whistleblower awards.
Continue Reading Whistleblowers: Boom or Bust?

Based on numbers alone, the SEC’s Whistleblower Program grew significantly in 2013.  According to the Annual Report to Congress on the Dodd-Frank Whistleblower Program, released late last year, the number of whistleblower tips and complaints the Commission received increased from 3,001 in the 2012 fiscal year to 3,238 in the 2013 fiscal year.  The Commission also made its largest whistleblower award to date in 2013, issuing a record $14 million. However, behind these numbers lies another story.  Over the last year, the scope of the Whistleblower Program has been curtailed by judicial rulings narrowing the definition of a protected “whistleblower.”  On the home front, companies have been experimenting with ways to encourage internal reporting, attempting to avoid what can be the serious consequences of an SEC whistleblower claim.  Thus, the SEC has spent much of early-2014 protecting the scope of the Whistleblower Program from perceived attacks on both public and private fronts.
Continue Reading A War on Two Fronts: SEC Steps-Up Efforts to Protect Scope of Its Whistleblower Program