- All are welcome. Whistleblowers do not need to be U.S. citizens or residents to benefit from the statutes or reward programs
- The Securities and Exchange Commission has the most successful program. The SEC has reached over U.S. $1 billion in payouts to whistleblowers.
• In 2021, the SEC handled over 12,200 tips.
• Up 76% from 2020 and a more than 300% increase since the beginning of the program.
• Awards of about $564 million to 108 individuals in fiscal year 2021 (more than the combined total for fiscal years 2011 through 2020).
• The SEC received tips from individuals in 99 foreign countries and from every state in the U.S., including the District of Columbia.
• Approximately 20% of the meritorious claimants in 2021 were based outside of the U.S.
- A reward program incentivizes even those who may be culpable. One notable September 24, 2021 SEC high-profile award to a whistleblower may set a precedent for other government whistleblower programs.
• The SEC awarded a $36 million bounty to a single whistleblower claimant, who provided information related to a SEC and another federal agency’s actions.
• The whistleblower delayed reporting for over five years (which is also the statute of limitations for most federal crimes).
• The whistleblower alleged misconduct by a financial institution and personnel from a “foreign government entity,” while being culpable for the underlying misconduct.
- The EU Directive on Whistleblower Protection provides broad protections abroad.
• The Directive:
• Seeks to protect those who expose wrongdoing both in the private and public sector;
• Covers a broad range of potential wrongful conduct; and
• Provides the EU Member States the minimum requirements for the internal whistleblower protection regulations.
• It mandated that EU Member States must pass national legislation to implement a majority of the minimum requirements. However, many members are in various stages of legislative adoption.
• The Directive requires all measures to be effective by December 17, 2023.
• A “whistleblower” under the Directive can include not only corporate employees, but those who may have a partial or future working relationship, including those who discover an issue during the recruitment process.
• Legal entities with over 50 workers will need to:
• Implement internal reporting channels to keep the whistleblower’s identity confidential;
• Provide the whistleblower an acknowledgement of the reporting within seven days;
• Share with the whistleblower, within a reasonable timeframe, any follow-up; and
• Give feedback to the whistleblower within three months of the reporting.
• The Directive also requires EU Member States to implement support measures for whistleblowers, which could include free legal advice, financial assistance, or psychological support.
- U.S. Government’s Expectations for Corporate Whistleblower Programs.
• The hallmarks of a well-designed compliance program include an “efficient and trusted” mechanism for employees to speak up anonymously and confidentially regarding alleged breaches of a code of conduct, policies, or suspected or actual misconduct.
• When assessing a whistleblower program, consider whether there is/are:
• Proactive measures to create an atmosphere without fear of retaliation;
• Appropriate process for submission of complaints;
• Process to protect whistleblowers;
• Process for handling investigations (e.g. routed to qualified personnel, timely completion of independent, objective, properly scoped and documented investigations);
• Appropriate follow-up and discipline; and
• Tracking and analysis of results.
• It is important to ask three key questions when evaluating a whistleblower program:
• Is the system well-designed?
• Is the system applied earnestly and in good faith (adequately resourced and empowered to function effectively)?
• Does it work in practice?
Source link