USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
blower activity varies, depending on the setting and US jurisdiction. The list below details the key statutory whistle- blowing provisions at the federal level. • Sarbanes-Oxley (SOX) Act (principally 18 U.S.C. Section 1514). • Dodd-Frank Wall Street Reform and Consum - er Protection Act (7 U.S.C. Section 26). • SEC Whistleblower Statute (15 U.S.C. Sec - tion 78u-6). • SEC Whistleblower Rules (17 C.F.R. Section 240.21F). • CFTC Whistleblower Rules (17 C.F.R. Section 165 et seq). • Federal False Claims Act (31 U.S.C. Sections 3729–3733). By way of illustration, the Sarbanes-Oxley Act (SOX) protects employees of publicly traded companies and their affiliates from retaliation for reporting alleged mail, wire, bank or securities fraud and related violations. The details of a permissible whistle-blower pro - tection claim (such as the statute of limitations) vary from one statute to another. For example, SOX requires an employee to file a written com - plaint within 180 days after an alleged retaliation, while the Dodd-Frank Act permits claims for up to ten years. 6.5 Incentives Provided to Whistle- Blowers The SEC and Commodity Futures Trading Com - mission (CFTC) have programmes to pay mon - etary awards to whistle-blowers who voluntarily provide new information about a violation of rele - vant laws (including bribery or corruption-related offences) that leads to a successful enforcement action. Whistle-blowers may be entitled to an
award if the agency recovers a monetary sanc - tion over USD1 million. The SEC and CFTC are required to give all entitled whistle-blowers an award of at least 10% and as much as 30% of the resulting penalties. As of the end of the fiscal year 2023, the SEC programme had resulted in nearly USD2 billion in payments to almost 400 whistle-blowers since the programme began in 2011. In April 2024, the DOJ announced a similar Cor - porate Whistleblower Awards Pilot Program, which will entitle non-culpable individuals to receive a portion of assets that result from suc - cessful prosecutions involving criminal or civil forfeitures. It also announced a Pilot Program on Voluntary Self-Disclosure for Individuals, which offers culpable individuals who co-operate with DOJ investigations discretionary grants of immu - nity, and entry into non-prosecution agreements. The programs will run for three years. Since April 2024, several US Attorney’s Offices – including those in the Southern District of New York and the Northern District of California – have imple - mented similar programmes that allow whistle- blowers to receive non-prosecution agreements, even if those whistle-blowers were involved in the underlying misconduct. Finally, a whistle-blower who files a civil action under the False Claims Act or similar state laws alleging false representations in connection with a government-funded programme may be enti - tled to receive a substantial award based on the damages suffered by the relevant government agency. These suits may involve corruption- related allegations (eg, that a government con - tract was awarded based on a false representa - tion that the contractor was not affiliated with any public officials). The state or federal gov - ernment generally has the option to intervene
474 CHAMBERS.COM
Powered by FlippingBook