Employment Law • Whistleblower-Qui Tam Claims • Criminal Defense
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SEC modifies whistleblower compensation rules

On Behalf of | Nov 9, 2020 | Whistleblower/Qui Tam Claims

Georgia residents may know that the Whistleblower Protection Enhancement Act of 2012 established significant protections for federal workers who report fraud to the various oversight agencies of the federal government. The Department of Homeland Security and the Securities Exchange Commission are chief among these oversight departments. The law sets the parameters for compensation paid to whistleblowers as well as spelling out the protections they are allowed regarding retaliation by bureaucratic managers who may be involved in the fraudulent activity.

The rules controlling how whistleblowers are compensated in qui tam claims has been recently modified by raising the minimum amount of compensation that any whistleblower is awarded. Whistleblowers are compensated based on the amount of funds recovered in the investigation and prosecution of fraudulent actors, and it has long been thought the amount in the original whistleblower protection legislation was insufficient for a true reflective rate of fraud within government. Even with certain retaliation protections in place, there are other ways an agency can go after an employee when they report wrongdoing in the department.

It is important to note that the SEC did not adjust the 30% award that whistleblowers are typically assigned by the court; neither did they add any protections for federal employees providing evidence in case prosecutions. What the SEC did was raise the maximum amount of compensation for whistleblowers from $2 million to $5 million for a successful case prosecution or a restitution agreement in a plea bargain. All retaliation impedance rules remain in effect for those willing to come forward with valid claims.

This indeed is a significant adjustment that whistleblower attorneys across the nation hope will encourage reporting of fraudulent acts by honest federal employees. Whistleblowers have several designated rights and legal protections regarding maintaining employment while also in the process of providing government information and testimony. Whistleblowing can assuredly make for a hostile work environment, but the application of the law by legal representatives may also result in additional legal action and prosecution for violations committed against whistleblowers.

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