What is a whistleblower?
A whistleblower is a person who exposes wrongdoing. In the United States, there are federal and state laws that offer whistleblowers rewards and whistleblower protections for exposing certain types of wrongdoing (see details below). Not all whistleblowing is protected. In certain circumstances, violating the law to expose unlawful conduct may subject a whistleblower to liability. Examples include a CIA employee disclosing classified information, an IRS employee disclosing taxpayer information, or a Treasury employee disclosing a suspicious activity report. Prior to blowing the whistle, whistleblowers should consult with an experienced whistleblower attorney to understand their rights and protections.
Whistleblower Rewards and Protections
A whistleblower reward is a monetary incentive offered under various whistleblower reward programs to individuals for exposing certain types of wrongdoing. If the government uses a whistleblower’s information to recover funds, the whistleblower may receive up to 30% of the recovery as a reward. There are four main whistleblower reward programs in the United States:
- SEC Whistleblower Program
- CFTC Whistleblower Program
- IRS Whistleblower Program
- False Claims Act / Qui Tam Lawsuits
Many state and federal laws also afford whistleblowers substantial protections against retaliation. If you are seeking representation in a whistleblower case, click here, or call us at 202-262-8959 to schedule a free, confidential consultation.
SEC Whistleblower Program
Under the SEC Whistleblower Reward Program, the SEC is required to issue awards to whistleblowers who provide original information about violations of the federal securities laws that leads to enforcement actions with total monetary sanctions in excess of $1 million. A whistleblower may receive an award of between 10% and 30% of the monetary sanctions collected. The largest SEC whistleblower awards to date are $50 million, $39 million and $37 million. To date, enforcement actions from whistleblower tips have resulted in nearly $2 billion in financial remedies.
The most common types of tips reported to the SEC Office of the Whistleblower include:
- Accounting fraud;
- Investment fraud;
- Foreign bribery and other FCPA violations;
- EB-5 investment fraud; and
- Fraudulent securities offerings, such as Ponzi and pyramid schemes.
The SEC Whistleblower Program allows whistleblowers to submit anonymous tips to the SEC if represented by an attorney. Whistleblowers are also afforded substantial privacy, confidentiality, and anti-retaliations protections.
To learn more about the SEC Whistleblower Program, download Zuckerman Law’s eBook SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.
CFTC Whistleblower Program
Under the CFTC Whistleblower Program, the CFTC is required to issue awards to whistleblowers who provide original information about violations of the Commodity Exchange Act that leads to enforcement actions with total monetary sanctions in excess of $1 million. In exchange for the information, a whistleblower may receive an award of between 10% and 30% of the total monetary sanctions collected. The largest CFTC whistleblower reward to date is $30 million.
The most common types of tips reported to the CFTC include violations or fraud, such as market manipulation, in connection with:
- Commodity futures;
- Commodity options;
- Swap trading markets;
- Derivatives; and
Like the SEC Whistleblower Program, whistleblowers may submit anonymous tips to the CFTC if represented by an attorney and are afforded substantial privacy, confidentiality, and anti-retaliations protections.
IRS Whistleblower Program
Under the IRS Whistleblower Program, the IRS is required to issue awards to eligible whistleblowers who provide original information about tax fraud or underpayments in excess of $2 million (or if the taxpayer is an individual, his or her gross income must exceed $200,000 for at least one of the tax years in question). A whistleblower may receive an award of between 15% and 30% of the total “proceeds” collected by the IRS, which includes:
- Penalties, interest, additions to tax, and additional amounts provided under the internal revenue laws; and
- Any proceeds arising from laws for which the IRS is authorized to administer, enforce, or investigate, including criminal fines and civil forfeitures, and violations of reporting requirements.
False Claims Act / Qui Tam Lawsuits
The False Claims Act (FCA) contains a provision allowing whistleblowers, or qui tam “relators”, to bring suits on behalf of the United States against the false claimant. The Act was signed into law to combat fraud against the government and provides whistleblower awards of between 15% and 30% percent of monetary recoveries. The largest qui tam whistleblower reward to date is $250 million.
Examples of the types of fraud that can qualify for a qui tam whistleblower award include:
- Paying kickbacks to refer patients for services that will be reimbursed by Medicare;
- Fraudulently inducing a contract, i.e., making false representations to induce the government to enter into a contract;
- Bid rigging; and
- Violations of good manufacturing practices.
Whistleblowers provide a vital public service and the law generally encourages whistleblowing. But some whistleblowing is unlawful. For example, Edward Snowden acted unlawfully when he leaked confidential national security information to the media. In the past year, additional whistleblowers have been prosecuted or convicted for making alleged unlawful disclosures, including:
- Tesla sued a former employee, Martin Tripp, for allegedly hacking, stealing and leaking confidential company information to the press;
- A senior Treasury Department employee was arrested and charged with disclosing suspicious activity reports to a reporter;
- A former PwC employee, Antoine Deltour, was convicted (which was later overturned by Luxembourg’s highest court) for passing confidential tax information on PwC clients to the media.
Whistleblowers should consult with experienced whistleblower attorneys in order to determine how to report to the government and what type of evidence to report. Moreover, whistleblowers should consult with an experienced whistleblower attorney to determine if their claim qualifies for a reward under one of the whistleblower reward programs. For more information about whistleblower rewards and bounties, contact leading whistleblower law firm Zuckerman Law at 202-262-8959 or email us at email@example.com.
Top-Rated Whistleblower Lawyers
We have assembled a team of leading whistleblower lawyers to provide top-notch representation to SEC whistleblowers. Recently Washingtonian magazine named two of our attorneys top whistleblower lawyers. U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area
- Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Mr. Stock developed an expertise in financial statement analysis, internal controls testing and fraud recognition, and he uses his auditing experience to help whistleblowers investigate and disclose complex financial frauds to the government and obtain damages for retaliation.
- Both Bachman and Zuckerman served in senior positions at the Office of Special Counsel, where they oversaw investigations of whistleblower retaliation claims and whistleblower disclosures, and enforced the Whistleblower Protection Act.
- Jason Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2018, 2017, 2015, 2009, and 2007 selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2017), and selected by his peers to be listed in SuperLawyers(2012 and 2015-2017) in the category of labor and employment law. is rated 10 out of 10 by Avvo, based largely on client reviews, and rated AV Preeminent® by Martindale-Hubbell based on peer reviews.
- Bachman and Zuckerman served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protections.
- The firm has published extensively on whistleblower rights and protections, and regularly speaks nationwide at seminars and continuing legal education conferences. We blog about new developments in whistleblower law at the Whistleblower Protection Blog.