This past May, the U.S. Department of Justice awarded $4.5 million to a whistleblower under the Securities and Exchange Commission’s whistleblower program. While that is a significant whistleblower reward, the large payout isn’t what makes this case unique. This is actually a “feelgood” whistleblower story, where the whistleblower filed his case with the SEC and told his company about the ongoing fraud. The company performed an internal investigation that confirmed that the whistleblower’s claims were accurate, leading the company to self-report the misconduct. Thus, the whistleblower still received his compensation even though the company did the right thing and also self-reported the fraud. While this case worked out well for the whistleblower, I will highlight some potential pitfalls to this strategy below.
Are you considering becoming a whistleblower? You will need the help of an experienced whistleblower attorney to help you answer questions and prepare your case. Contact Barrett Law now at (800) 707-9577 to attain the advice you need.
Timing and Dual Reporting Are Critical to Receiving the Reward You Deserve
In this case, the whistleblower both reported wrongdoing internally to his company and reported the same conduct to the SEC within 120 days. As I mentioned above, the company then performed an internal investigation that resulted in the validation of the whistleblower’s report and the company’s decision to self-report its findings to the SEC. All of those facts are critical, as the SEC’s whistleblower provision mandates that a whistleblower can be compensated if his or her time is made internally and to the SEC within 120 days. If a whistleblower dual reports and the internal report to the company results in a self-report, then the whistleblower will receive a reward ranging from 15% to 30% of all money recovered. As I have discussed in earlier blog posts, that reward frequently falls in the million dollar range.
As I mentioned, it is critical that the whistleblower both notified his company and the SEC of the fraud. You may remember an earlier blog post I wrote about the U.S. Supreme Court’s decision in Digital Realty Trust, Inc. v. Somers, which held that a person who only reports fraud internally could not avail themselves of the SEC whistleblower program’s anti-retaliation provisions. That means that if a whistleblower only reports internally, they do not have legal recourse if the company retaliates against them for reporting fraud. Shockingly, this is true even if the company self-reports the fraud to the SEC. Similarly, it is vital that the whistleblower make his or her report to the SEC within 120 days of making an internal report. If the report is made later, the whistleblower is not eligible to receive compensation under the SEC’s whistleblower program.
What Should You Do if You are Considering Making a Whistleblower Claim?
The narrative I provided above demonstrates just some of the complexities of making a report of ongoing fraud to the SEC. The U.S. Department of Justice and the SEC receive thousands of potential whistleblower claims each year, and only those that meet their requirements and are reported in a way that triggers their interest are acted upon. Even if you have a strong allegation, if your case is disorganized or is missing important elements, it will likely be ignored. Contact Barrett Law now at (800) 707-9577.
Experienced whistleblower lawyer Barrett can provide you with the advice you will need to file a successful whistleblower case. Having expert legal advice by your side can mean the difference between receiving your share of a whistleblower reward and losing your career and livelihood. Call us today. Our Mississippi Whistleblower Lawyer looks forward to making a difference for you.
