Bounties for Whistleblowers | Hodgson Russ

The recent regulatory reform package known as the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the Securities and Exchange Commission to pay bounties to whistleblowers whose information results in a monetary recovery. In cases involving valuable information concerning securities fraud, the whistleblower payment can be as high as 30 percent of the total recovery. There is good reason to believe that these bounty provisions will extend to cases involving violations of the Foreign Corrupt Practices Act of 1977 (FCPA), which broadly prohibits the payment of bribes to foreign officials for the purpose of obtaining government contracts; securities fraud occurs because the bribes are seldom, if ever, properly accounted for on a company’s books. Recent FCPA cases have resulted in recoveries in the tens of millions of dollars.

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