Award Winning Attorneys
SEC Whistleblower Program
News & Insights
On the heels of the SEC’s announcement of its first whistleblower award, the IRS announced last week that it would pay one of its first awards—a startling $104 million—to a former UBS banker, Bradley Birkenfeld, who aided the government in connection with its investigation into the bank’s practice of helping wealthy U.S. taxpayers hide billions of dollars in secret accounts.
The IRS and SEC whistleblower programs are different—both in form and function. For one thing, individuals criminally convicted of related misconduct do not qualify for monetary awards under the SEC Whistleblower Program (though they may benefit from the program’s anonymity and employment protections). The programs also have different guidelines about protecting the identity of the whistleblower. (Under the SEC program, whistleblowers working with an attorney do not need to disclose their identity when submitting a claim.) In addition, while the SEC Whistleblower Program applies only if the monetary sanctions the agency collects exceed the minimum threshold of $1 million, the program can also extend to recoveries by other regulatory and law enforcement organizations that stem from the whistleblower’s information. This means that eligible SEC whistleblowers can also receive monetary awards for sanctions collected in related parallel proceedings by other agencies, such as the Department of Justice. To provide a sense of scope, in fiscal year 2011, the SEC recovered more than $2.8 billion in monetary sanctions alone and many of its more significant cases had successful related enforcement actions with large monetary sanctions collected by other agencies.
Despite these differences, the two federal whistleblower programs share a common goal – a call for the public to step forward and speak out against wrongdoing. And the buzz around the recent whistleblower awards suggests that the public is hearing to the call.
For further analysis on the recent IRS award and the differences between the SEC and IRS whistleblower programs, please see an instructive story from Reuters here.