In the U.S., whistleblowing has long been big business for lawyers and consultants. Huge rewards and high commissions are at stake for the consultants involved. Whistleblowing has a long tradition in the U.S. and has been a tradition under the False Claims Act (FCA) since the 19th century. Initially, the fight against fraud on the government has been incentivized, and now regulators work with whistleblower programs to efficiently expose violators of securities laws and financial fraud. The Internet has given whistleblowers wings. Most recently, the U.S. SEC again paid out over $3.6 million in whistleblower awards.
The SEC has awarded approximately $735 million to 127 individuals since issuing its first award in 2012. The latest payout happened in connection with three separate enforcement actions totaling over $3.6 million.
- A whistleblower was awarded over $1.8 million for providing significant information about a fraudulent scheme. The whistleblower took immediate steps to mitigate the harm to investors and provided substantial assistance to the staff, including providing testimony, key documents, and other information that saved SEC time and resources and contributed to an enforcement action that resulted in the return of millions of dollars to harmed investors.
- A second whistleblower received more than $1.2 million for providing information that led to successful enforcement action. The SEC determined that the whistleblower’s culpability and unreasonable delay impacted the award amount in making the award.
- Finally, more than $500,000 have been awarded to a whistleblower who provided significant information and ongoing assistance that led to an enforcement action’s success. In issuing the award, the SEC waived the TCR filing requirement based on the case’s unique facts and circumstances.
The John Grisham Business
Whistleblowing has also made it into the mainstream crime literature. The bestselling author John Grisham has recently published two bestsellers about whistleblowing – The Whistler and The Partner. In both of them, the core of the story is about whistleblower awards worth millions of dollars that lawyers, whistleblowers, and the villains fight over.
The Internet has actually boosted the whistleblower business. Lawyers, private investigative agencies, and whistleblowers can go worldwide in search of information and rewards. Most recently, this has helped solve scams from the binary options industry. More and more whistleblowers are coming forward to regulators and authorities looking to make money from their knowledge.
Crowdsourced financial intelligence combined with the already established whistleblower concept is certainly also the future in the fight against cybercrime.
