September 1, 2023
A whistleblower can be considered any individual who brings attention to the existence of previously covert wrongdoing. In some cases, whistleblowers stand to earn significant financial rewards for providing information to the federal government regarding certain types of illegal conduct.
Numerous whistleblowers have individually earned rewards in the millions of dollars for reporting information relating to violations of the federal False Claims Act (FCA) and of federal securities laws via the SEC’s Office of the Whistleblower. Over the history of the FCA, at least 8 individual rewards of $100 million or more have been paid out, and the SEC has paid out over $1 billion in rewards to whistleblowers.
While it is not required that a whistleblower work with an attorney to pursue a whistleblower action, there are many reasons that it is advisable to do so.
Working with a False Claims Act Attorney
The FCA makes it illegal for a party to defraud the federal government, for example by submitting Medicare reimbursements for services that were never provided or unnecessary. Each year, whistleblowers with knowledge of such activity – frequently in the form of Medicare and Medicaid fraud, customs fraud, and military procurement fraud – successfully pursue FCA lawsuits. A successful FCA plaintiff can obtain between 15% and 30% of the financial penalties imposed on the FCA defendant, and many of these individual rewards are in the millions of dollars.
To initiate an FCA claim, a plaintiff must file a qui tam complaint under seal in federal district court and serve a copy of the complaint and a written disclosure of substantially all material evidence and information the person possesses with the U.S. Attorney’s Office. The U.S. Attorney’s Office will then investigate the allegations contained in the complaint and written disclosure to determine whether it will intervene in the lawsuit. However, even if the government does not intervene in the case, a private FCA plaintiff may continue with the FCA claim.
The process for compiling evidence and setting it forth in a compelling FCA lawsuit – which faces multiple hurdles of convincing the government to join in the suit, and then later convincing a jury or persuading a defendant to enter into a sizable settlement – is complex and lengthy. It is thus important to work with experienced FCA whistleblower counsel who can oversee the processes of collecting evidence, drafting pleadings, communicating with the government, and potentially litigating or negotiating your case with the defendant.
Any potential FCA whistleblower should be concerned about retaliation from defendants and take steps to protect themselves from employers and other bad actors who may be prepared to take actions such as firing a whistleblower or damaging their reputation. Experienced FCA counsel can help guard your identity through at least the initial stages of the FCA complaint process, help you avoid retaliatory acts, and respond forcefully to any such retaliation that might occur.
Submitting an SEC Whistleblower Tip With Assistance of Counsel
A whistleblower who provides information to the SEC leading to a successful enforcement action leading to monetary sanctions exceeding $1 million is eligible to receive an award of between 10 and 30 percent of the monetary sanctions imposed in such an action. Past SEC enforcement actions have led to whistleblower rewards in the amounts of $114 million, $110 million, and $50 million, respectively.
In determining what percentage of the monetary sanctions should be rewarded to the whistleblower, the SEC uses the following criteria:
- The significance of the information provided by the whistleblower to the success of the enforcement action
- The degree of assistance provided by the whistleblower and any legal representative of the whistleblower in an enforcement action
- The interest of the SEC in deterring violations of securities laws by making awards to whistleblowers who provide information that lead to the successful enforcement of such laws; and
- Any such additional relevant factors that the SEC may establish by rule or regulation.
In the SEC’s own words, “the more specific, credible, and timely a whistleblower tip, the more likely it is that the tip will be forwarded to investigative staff for further follow-up or investigation.” The SEC encourages whistleblowers to provide information that “identifies individuals involved in the scheme, provides examples of particular fraudulent transactions, or points to non-public materials evidencing the fraud.”
Similar to the FCA complaint process, it is thus helpful to work with experienced SEC whistleblower counsel who can manage the evidence collection process and presentation of the information to better increase your chances of obtaining the highest whistleblower reward possible.
Retaliation by an employer or other market player may well be a concern with the SEC whistleblower process, and an attorney can provide protection against retaliation as well as potentially keeping your identity anonymous throughout the process. A person may submit a tip to the SEC Whistleblower Program anonymously, but that person must be represented by legal counsel to be eligible for a financial reward.
Contact a California Whistleblower Attorney Today
It is important to work with legal counsel with the experience to not only assist you in compiling and submitting your information in pursuit of obtaining the largest whistleblower reward possible – while at the same time protecting victims of fraud and promoting fair market competition – as well as the experience to protect you from retaliation and obtain justice on your behalf. If you have information that you believe may form the basis of an FCA claim or SEC whistleblower tip, contact our office today to schedule a consultation with one of our attorneys to determine your next steps.