In previous blogs, we’ve reported on whistle blowers who have won substantial recoveries as a result of being terminated or treated adversely due to their opposition activity.Now, we have a record $14 Million recovery to a whistle blower under the Dodd- Frank Wall Street Reform and Consumer Protection Act. This law provides that whistle blowers may receive up to 30% of penalties collected by the Securities and Exchange Commission. The overall recovery to the government must be at least one million dollars, as mandated by the act and its specific section, 922.
As this federal whistle blower program gains traction, rewards to whistle blowers will increase. For example, among the first awards, a whistle blower got $50,000. Tracking SEC press releases, there was a second settlement to be split among three whistle blowers of $125,000. The director of the SEC whistle blower office, Sean McKessy, has stated more awards are likely to be issued at a faster pace now that the program is up and running. The $14M was paid out approximately six months after the original information got to the SEC. In our experience, we have routinely seen Department of Justice investigations in aerospace and health care fraud cases take up to several years.
We hope that whistle blowers will continue to come forward to their private attorneys who specialize in these complex cases. Internal reporting to the corporate employer should be done very cautiously and only after discuss with an attorney. Surprisingly, even high-level corporate executives are entitled to share in these rewards. Awards will definitely increase in amounts as the SEC streamlines its investigative processes and publicity about this program increase. Not to minimize the impact the public announcement of a $14M share to a whistle blower will have!
Whistle blowers are commonly found in many industries. In fact, any industry, such as aerospace or health care, that routinely bills the government, has its share of claimants. Literally millions of dollars is paid annually by the federal government to whistle blowers. We also litigate our whistle blower clients’ rights to be free of wrongful termination and retaliation for whistle blowing.