Top Ten Whistleblower Awards of 2021

2021 was another banner year for whistleblowers, who once again collectively recovered billions of dollars for the government and hundreds of millions of dollars in whistleblower rewards under the various government whistleblower programs.  This includes awards under the qui tam provisions of the federal False Claims Act and various state False Claims Act programs.  It includes awards under the Dodd-Frank SEC Whistleblower and CFTC Whistleblower Programs.  And for the first time ever, it includes an award under the Motor Vehicle Safety Whistleblower Act.

Set forth below is a listing of the Top Ten whistleblower awards of 2021, which together amount to roughly $560 million in whistleblower payouts.  There are several notable features of this year’s listing.

First, 6 of the Top Ten awards (representing 4 of the top 5 awards) were made under the SEC Whistleblower Program, which with several blockbuster awards crossed the billion-dollar threshold in total awards to date.  This is the second year in a row the Top Ten whistleblower awards listing was dominated by SEC awards.  And given the overall stunning results of the SEC program this year, which followed a record-setting year in 2020, we can expect the flood of SEC whistleblower rewards to continue.

Second, the top award of 2021 was under the CFTC program.  The $200 million award was roughly twice as much as all prior CFTC awards combined and the largest ever awarded under any whistleblower rewards program.  Aside from this blockbuster award, it was an otherwise challenging year for the CFTC program with a relatively modest outlay of awards and some significant budgetary issues that risk the longevity of the program.  So the question remains whether this record-setting award was an aberration or a sign of a stronger CFTC program to come.

Third, Constantine Cannon is once again represented among the Top Ten recoveries through its client Hyundai/Kia whistleblower Gwang Ho Kim.  This follows last year’s Top Ten listing which included three Constantine Cannon clients, all part of the 2020 record-shattering year the Constantine Cannon whistleblower practice group had for the firm’s whistleblower clients.  Mr. Kim captured this year’s No. 9 spot with his $24.3 million award under the Motor Vehicle Safety Whistleblower Act.  It is the first award under the program, which is only a few years old, and surely just the first of many to come under this nascent program.

And on to this year’s Top Ten listing:

1. Deutsche Bank CFTC Whistleblower — An undisclosed whistleblower who reported violations of the Commodities Exchange Act under the CFTC’s Whistleblower Program received roughly $200 million. It is the largest award to a single whistleblower under any whistleblower rewards program, including the False Claims Act.  By all accounts, the whistleblower was a former Deutsche Bank employee who reported on widespread global manipulation of the LIBOR financial benchmark.  Aside from its size, another notable feature of the ground-breaking award is that a sizeable chunk of it was based on recoveries from two related enforcement actions, one by a different US agency and the other by a foreign regulator.
2. Anonymous SEC Whistleblower — An undisclosed whistleblower who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $110 million.  It is the second-largest SEC whistleblower award to date, pushing the SEC program past the one billion dollar threshold in total whistleblower awards.  Other than its size, there were two other important features of the award.  First, the majority of it originated from the recovery by a different enforcement agency.  And second, the whistleblower was an “outsider” who reported information based on an independent analysis of publicly available information, a fact the SEC went out of its way to promote.  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblower or the subject of the SEC enforcement action.
3. Anonymous SEC Whistleblowers — A pair of undisclosed whistleblowers who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $50 million.  It is the third-largest SEC whistleblower award to date.  According to the SEC, the whistleblowers “alerted SEC staff to violations that involved highly complex transactions and would have been difficult to detect without their information . . . [and which] resulted in the return of tens of millions of dollars to harmed investors.”  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblowers or the subject of the SEC enforcement action.
4. Anonymous SEC Whistleblower — An undisclosed whistleblower who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $36 million. The SEC found the whistleblower significantly contributed to a previously-opened SEC investigation and made the award based on recoveries by the SEC and another agency.  Notably, the SEC reduced the size of the award it otherwise might have provided, finding the whistleblower unreasonably delayed in reporting the misconduct and was involved in the underlying scheme (although not as a planner or initiator).  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblower or the subject of the SEC enforcement action.
5. Anonymous SEC Whistleblower — An undisclosed whistleblower who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $32 million.  According to the SEC, the whistleblower “caused the opening of the investigation and exposed difficult-to-detect violations, . . . [and] also provided substantial assistance to the staff, including identifying witnesses and helping the staff to understand complex fact patterns.”  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblower or the subject of the SEC enforcement action.
6. Arriva Medical Whistleblower — Former Arriva employee Gregory Goodman received roughly $28.5 million from the $160 million Arriva agreed to pay to settle charges for violating the False Claims Act by defrauding Medicare on sales of diabetic testing equipment.  The alleged misconduct included waiving patient co-pays (a form of illegal kickback), billing for equipment without regard to Medicare eligibility or medical necessity, and billing for deceased patients.  Mr. Goodman had worked at an Arriva call center in Tennessee.  Arriva ceased operations in 2017.  Its parent company Alere Inc. (now owned by Abbot Laboratories) was also a party to the settlement.
7. Anonymous SEC Whistleblower — An undisclosed whistleblower who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $28 million.  The award was based on recoveries by the SEC and another federal agency.  According to the SEC, “the whistleblower’s information caused both the SEC and the other agency to open investigations that resulted in significant enforcement actions.”  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblower or the subject of the SEC enforcement action.
8. Anonymous SEC Whistleblowers — A pair of undisclosed whistleblowers who reported violations of the Securities Exchange Act under the SEC Whistleblower Program received $27 million.  The SEC stressed the important role whistleblowers play even for existing investigations: “Whistleblowers play a critical role in an investigation, whether at the outset or during the course of an investigation.”  Pursuant to the SEC’s whistleblower confidentiality provisions, the SEC did not reveal the identity of the whistleblowers or the subject of the SEC enforcement action.
9. Hyundai/Kia Whistleblower — Constantine Cannon client Gwang Ho Kim received $24.3 million from the $210 million Hyundai and Kia agreed to pay in penalties relating to their efforts to conceal critical engine defects in millions of Hyundai and Kia vehicles.  It was the first-ever whistleblower award to an auto-industry insider under the Motor Vehicle Safety Whistleblower Act.  And it resulted in the largest penalties the National Highway Traffic Safety Administration (NHTSA) has ever assessed against a carmaker.  Mr. Kim, a former Hyundai safety engineer, provided detailed information on these defects to NHTSA, which ultimately found that Hyundai and Kia delayed recalling over 1.6 million vehicles and provided inaccurate information about the defects to regulators.
10. Sandell Whistleblower — An undisclosed whistleblower received $22.05 million from the $105 million hedge fund manager Thomas Sandell agreed to pay to settle charges of violating the New York False Claims Act by falsely claiming $450 million in management and performance fees were not subject to New York State and city taxes.  According to the government and the whistleblower, Sandell’s New York tax avoidance scheme involved moving to London, opening an office in Florida, and managing the expenses of his fund (Sandell Asset Management) through a shell company.  The settlement is the largest New York False Claims Act recovery ever against an individual defendant.

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Please contact us if you would like more information on any of these awards or the whistleblower programs under which the awards were made, or if you would like to speak with one of our experienced whistleblower lawyers.  And to gauge the likelihood of yourself becoming a whistleblower, please spend a minute to take our whistleblower quiz.  You might be surprised by the result.

READ MORE:

• CFTC Whistleblower Program
• False Claims Act
• State False Claims Act
• SEC Whistleblower Program
• I Might Have a Whistleblower Case
• Whistleblower FAQs

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