Being a whistleblower is a noble decision that also puts you at great personal risk. There is a possibility of being fired from your job or even threatened with violence if you make your intentions to blow the whistle on a criminal act known. Further, reporting illicit activity requires strong legal evidence, otherwise you may risk penalties for your efforts. No matter the case, consulting with an experienced white-collar criminal expert at the Cambridge firm of Altman & Altman LLP is essential to success.
What protections exist for whistleblowers?
Under the Dodd-Frank Act, whistleblowers who provide otherwise unknown, valuable information to the Securities Exchange Commission (SEC) that results in monetary sanctions exceeding $1 million are not only eligible for a percentage of that sanction as a reward, they are also given ironclad protection against retaliation by their employer or organization. Whistleblowers will even be granted a private cause of action if they are discharged or unfairly discriminated against by their employer as a result.
Due to a unanimous Supreme Court ruling in February of 2018, however, these whistleblower protections under the Dodd-Frank Act – which was passed after the financial crisis of 2008 and were finally implemented in 2011 – now only apply to individuals who report financially criminal issues to the United States SEC, and not if they only try to blow the whistle within the ranks of their own company or organization.
What this means is that a whistleblower will no longer be protected under Dodd-Frank unless they go through the process with the SEC’s program. Reporting through another federal agency, such as the IRS, will not net the same protections – although the IRS has its own rules regarding protection of whistleblowers, including potential payment for successful claims, they do not share similar protections as Dodd-Frank.
However, this does not mean whistleblowers are denied protections under the federal government entirely. An older law, the 2002 Sarbanes-Oxley Act, provides certain protections but also nets significantly less money than those pursuing whistleblowing under Dodd-Frank. While Sarbanes-Oxley protects whistleblowers of publicly-traded companies, its statute of limitations following the retaliation is 90 to 180 days – significantly less than the six years allotted to Dodd-Frank whistleblowers. Continue reading