Whistleblowers awarded nearly $400 million since 2010
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Whistleblowers awarded nearly $400 million since 2010

| Jun 15, 2020 | Firm News

When whistleblowers come forward, they put their careers and those of others on the line. This remains an unfortunate consequence of telling the truth and maintaining high standards of integrity. While federal laws exist against retaliation, employers still do lash out in various ways, especially when it comes to false allegations. Employees might also take negative actions against the individual. 

U.S. News noted that to counter the risk of retaliation, the government created the Wall Street oversight law in 2020. This provided portions of the money recovered in cash to the whistleblowers, thereby prompting more people to speak out. 

Where the money comes from 

Since the program took full effect in 2011, the Securities and Exchange commission recovered $2 billion in restitution and penalties that resulted from roughly 26,000 tips. Many taxpayers mistakenly believe that they foot the bill when whistleblowers get large payouts. The money actually comes from the recoveries. Whistleblowers generally get anywhere from 10% to 30% of the money. 

Proposed changes 

The new administration has since made proposals to change the law that many say would make the program less effective. In fact, one person said the changes ran counter to every rule, law and policy currently in place for the benefit of whistleblowers. 

The SEC rejects this and says the potential changes aim only to compel people to give higher-quality tips and to discourage money-grabbing. It also plans to reduce the amount of money people receive to the greater of $30 million or 10%. 

People who disagree with the changes say it is a bad idea to change something that has worked so well for so long. CNBC reports that since 2011, SEC successfully made recoveries based on information from 66 whistleblowers. Together, these professionals received $387 million in bounty payments. Others say it has become a “business model” and undermines the integrity of the system by leaving too much room for false claims.