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Watch Now: Eric Havian Joins OffshoreAlert Panel with SEC, CFTC, and IRS Whistleblower Officials on Rewards for Domestic and Foreign Whistleblowers

Posted  April 2, 2021

For the third year in a row, Constantine Cannon partner Eric Havian participated in OffshoreAlert’s annual conference, vGlobal, speaking on a panel with senior leaders of the whistleblower programs at the SEC, CFTC, and IRS.  The panel, which you can watch below, “Rewarding Domestic & Foreign Whistleblowers: The Growth & Spreading Reach of U.S. Programs,” addressed the international reach of the U.S. whistleblower reward programs, hot areas of enforcement, and important new rules and procedures practitioners and whistleblowers need to know.  Joining Mr. Havian was the head of the SEC’s Office of the Whistleblower Jane Norberg, the CFTC’s Whistleblower chief Christopher Ehrman, and the IRS’s Whistleblower Office Program Manager Dawn Applebaum.

Havian and the other panelists emphasized the government’s continuing commitment to the SEC Whistleblower Reward Program, the CFTC Whistleblower Reward Program, and the IRS Whistleblower Program.  The programs regularly provide hefty whistleblower rewards to whistleblowers from the U.S. and international whistleblowers.

Ms. Norberg highlighted the SEC’s dramatic increase in whistleblower rewards – tripling in the past year alone – and said the SEC recently awarded $114 million to a single whistleblower. In addition to the dollar amount, Mr. Havian said the SEC has frequently awarded at or near the 30 percent maximum amount permitted under the regulations, which is “great news” for whistleblowers.

At the IRS, Ms. Applebaum stated it is now providing whistleblower rewards related to FBAR (Foreign Bank and Financial Accounts) penalties and criminal fines – an important avenue for whistleblowers with information about money laundering violations.

The panelists also discussed several practice pointers and tips, including:

  • The SEC’s new rule requiring a whistleblower to submit a tip (specifically, a form TCR) within 30 days of first contacting the SEC, or 30 days from the retention of counsel. Ms. Norberg noted that this is a strict rule the SEC intends to enforce, though the SEC retains the discretion to determine whether a whistleblower had actual or constructive knowledge of the requirements.
  • While the CFTC and IRS do not have a corresponding 30-day rule, but both Mr. Ehrman and Ms. Applebaum stressed that timeliness is key to a quality tip and the government’s ability to prosecute fraud occurring in real-time.
  • Havian instructed that the government is more willing to boost awards for information that is specific, detailed, and timely, and where the whistleblower provides ongoing assistance to the investigation.

Mr. Havian raised the then proposed and now passed U.S. anti-money laundering whistleblower reward program, administered by the Treasury Department’s Financial Crimes Enforcement Network. The program is aimed at busting money laundering schemes worldwide, and given the global reach of these schemes, the program will rely heavily on foreign whistleblowers. Mr. Havian noted one serious flaw in the program: unlike every other U.S. reward program, there is no minimum guaranteed percentage for an award (the maximum is set at 30 percent). Nonetheless, Mr. Havian said this new program will be “massive” and that “if any of you out in the audience are running a money laundering scheme, watch out for your employees and confidants.”

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Tagged in: CC Lawyers, CFTC Whistleblower Reward Program, Financial and Investment Fraud, IRS Whistleblower Reward Program, SEC Whistleblower Reward Program, Tax Fraud,