A New Whistleblower Program Announced by the Department of Justice
On March 7, 2024, the U.S. Department of Justice announced plans for a new whistleblower program that will provide financial awards to those who uncover corporate and financial misconduct in a wide range of fields. The program is expected to commence in mid-2024.
Under current law, the Justice Department already has authority to pay awards for information or assistance that leads to civil or criminal forfeitures, but the Department has paid such awards only occasionally. Now the Department plans to expand its use of that authority to fill gaps in the whistleblower programs operated by other agencies — including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Internal Revenue Service, and the Treasury Department’s Financial Crimes Enforcement Network.
The awards programs operated by those other agencies are necessarily limited to conduct that falls within the particular agency’s jurisdiction. Monetary awards are also available in suits brought by whistleblowers under the False Claims Act, but only in cases where fraud against the government is involved.
Now the Justice Department will launch its own awards program to target the full range of corporate and financial misconduct subject to prosecution by the Department — including cases where private parties rather than the government are defrauded. Whistleblowers who provide useful, non-public information to the Department could qualify to receive a portion of any forfeiture that results.
The Department has said that it will accept information about violations of any federal law, but will be especially interested in information regarding:
- Criminal abuses of the U.S. financial system;
- Foreign corruption cases outside the jurisdiction of the SEC, including, for example, violations of the Foreign Corrupt Practices Act that do not involve securities issuers, and violations of the recently enacted Foreign Extortion Prevention Act; and
- Domestic corruption cases, especially cases involving illegal corporate payments to government officials.
The Department expects to issue a detailed set of program guidelines soon.
Like other whistleblower programs, the Department’s program will follow a “first in the door” rule, under which an award may be granted only if the whistleblower provides information that the Department has not previously received from another whistleblower or otherwise obtained. It will be important therefore to consult promptly with experienced whistleblower counsel if you have information that may be of interest to the Department.
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