In the latest Weekly Wright Report:
The DOJ Will Soon Have a Shiny New Whistle to Fight Corporate Misdeeds
At a recent American Bar Association meeting in March, 2024, the Department of Justice (“DOJ”) announced a new pilot program that will compensate whistleblowers if they provide information on significant financial crimes or corporate corruption.
Under the new program whistleblowers who voluntarily provide truthful information on “significant corporate or financial misconduct” that is not already known by the DOJ may be entitled to share in any resulting monetary forfeiture. This DOJ program will only apply to whistleblowers who are otherwise not eligible for financial rewards or incentives under other federal whistleblower programs such as the False Claims Act, and Foreign Corrupt Practices Act and other similar programs at the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, the Internal Revenue Service, and the Financial Crimes Enforcement Network.
The DOJ will develop and implement the program over the next 90 days and it anticipates launching the program later in 2024. Other potential conditions on recovery under the DOJ program will include that all victims must have been compensated first before any compensation can flow to the whistleblower, and the whistleblower cannot have been involved in the criminal activity.
Other such programs have been very successful. For example, under the Securities Whistleblower Incentives and Protection program, the SEC has awarded more than $1 billion to whistleblowers since 2012. Last year the government recovered over $2 billion under the False Claims Act. According to the DOJ, this new program is designed to fill in the gaps regarding corporate and financial misconduct of the other programs which are limited to the specific jurisdictions of particular agencies or which involve only fraud against the government.
The program seeks to turn every employee or third party with knowledge of corporate wrongdoing into a potential whistleblower with the financial incentive of sharing in the recovered monetary forfeiture.
If you have any questions regarding this matter, please do not hesitate to contact any member of our Corporate and Business Law practice group.