Key Takeaways
- Largest year ever for whistleblower awards (nearly $600 million in total)
- Largest single whistleblower award ever ($279 million to an individual whistleblower)
- Largest year for whistleblower tip volume (over 18,000 tips submitted to the SEC)
- The SEC underscores its whistleblower protection efforts through Rule 21F-17 enforcement
On November 14,
On August 14, 2023, in a rare whistleblower award opinion, the Eleventh Circuit affirmed the Securities and Exchange Commission’s (SEC) denial of a whistleblower award in Granzoti v. Securities and Exchange Commission, 2023 WL 519503 (11th Cir.). The opinion establishes that eligibility for SEC whistleblower awards follows an actual causation standard – i.e.,
On July 12, 2023, the Securities and Exchange Commission (SEC) awarded $9 million to a whistleblower who submitted a tip through the SEC’s Whistleblower Program. Per agency policy, the Award Order is heavily redacted and does not reveal the nature of the enforcement action, let alone the whistleblower’s identity.
On May 5, 2023, the Securities and Exchange Commission (“SEC”) announced that it had awarded a single whistleblower $279 million. This is the largest award made under the SEC’s Whistleblower Program by a long shot – more than double the now-second highest award, which stands at $114 million. In fact,
Takeaways:
- The Treasury Whistleblower Program now provides for guaranteed awards of 10% to 30% of the government recovery in covered actions
- The Treasury Whistleblower Program has been expanded to include not just tips concerning anti-money laundering violations but also those regarding various forms of sanctions evasion
- The new law goes hand-in-hand with the government’s aggressive crackdown on Russian sanctions evaders and those that assist them
During the holidays,
The United States government has four primary whistleblower statutes and reward programs:
- The Federal False Claims Act (“FCA”)
- The Securities and Exchange Commission (“SEC”) Whistleblower Program
- The Internal Revenue Service (“IRS”) Whistleblower Program
- The Commodity Futures Trading Commission (“CFTC”) Whistleblower Program
All of these whistleblower programs are quite democratic.
Takeaway: Recent qui tam settlement highlights the DOJ’s continued focus on fraud and abuse in the diagnostics industry and robust enforcement of the Anti-Kickback Statute.
Earlier this month, Snap Diagnostics LLC and two of its executives entered into a nearly $4 million settlement with the United States to settle two qui tam lawsuits.
Takeaways:
- Stock promoters have moved from boiler rooms and stock newsletters to social media services.
- The COVID-19 pandemic and the “meme stock” mania that accompanied it brought an influx of retail traders to public markets.
- Those retail investors have proven to be prime fodder for social media stock promoters.
In Insinga v. Commissioner of Internal Rev. Service, 9011-13W, 2021 WL 4983084 (U.S. Tax Ct. Oct. 27, 2021), the United States Tax Court recently tackled an issue of first impression: whether an IRS whistleblower’s claim may survive death such that the claim may be pursued by his or her estate in the U.S.
Takeaway: Misconduct in the multitrillion dollar derivatives market can lead to massive recoveries for the government and whistleblowers alike. Even when the CFTC is already on the case, a whistleblower who tips off the government during an ongoing investigation may remain eligible for an award if they provide original information that “substantially contributes” to a successful enforcement action.
