A whistleblower is a company employee or supplier who has the authority to alert the public about any wrongdoing or fraud. A whistleblower reward is a monetary incentive granted by the government in exchange for the whistleblower’s bravery in bringing a successful enforcement action under a set of statutes known as whistleblower law. The main motive of these rewards is to provide a safe and secure life to the whistleblower. These awards can encourage the whistleblowers to work constructively and remove the fraudulent activities around them.
The whistleblower incentive program’s goal is to shield whistleblowers from retaliation while also allowing them to disclose scams anonymously. After the enforcement actions are completed, a potential whistleblower may be eligible for a reward of up to 30% of the monetary fines. This is effective in combating anti-fraud legislation and in thwarting fraud attempts. As a result, whistleblower incentive laws are the government’s most powerful civil weapon in combating taxpayer fraud. In this regard, four prominent whistleblower reward schemes for reporting wrongdoing are valued for their superior security and safety of whistleblowers.
- SEC Whistleblower Reward Program
This is a program that compensates and incentivizes whistleblowers who expose violations of federal securities laws. A whistleblower may be eligible for a reward of 10% to 30% of the monetary sanctions that may be collected. According to SEC 2020, the largest award given to date is over $114 million.
- CFTC Whistleblower Reward Program
The CFTC Whistleblower (Commodity Futures Trading Commission’s) Reward Program is established to reward anyone who discloses rights breaches or frauds under the Commodity Exchange Act. According to figures from 2021, the greatest reward offered was around $200 million.
- IRS Whistleblower Reward Program
Reporting tax crimes or underpayments might result in IRS whistleblower rewards. It normally delivers between 15% and 30% of monetary sanctions. A single whistleblower received the greatest prize, which was over $104 million.
- False Claims Act (Qui Tam Lawsuits)
It is a whistleblower reward given for reporting fraud against the government. It is the most effective and widely used law that rewards citizens for exposing government fraud. The largest award under the False Claims Act is estimated to be around $250 million.
Importance of Whistleblower Rewards Programs
Whistleblowers’ lives are jeopardized by a variety of factors, including employment risks. The benefits laws have the unique ability to convey a clear message to potential whistleblowers that their information is valued and can reduce the danger of retaliation and threats. The preservation of whistleblowers’ rights is an effective work that results in successful prosecutions, thus the financial advantages are welcomed.
The reward rules are extremely effective for a variety of reasons, including the fact that they encourage positive behavior among employees who see misbehavior and generate a deterrent impact in the market for greater award payments.
It is far simpler to file a whistleblower reward, but patience is the secret element as it might take years to get approved. Another factor to evaluate is if the whistleblower has sufficient proof to substantiate the fraudulent actions. Following the conclusion of the investigation, the whistleblower is eligible for the appropriate incentives based on the act or deed. The most desirable reward for a whistleblower’s unselfish bravery is monetary aid and incentives.