How One Whistleblower Won $279Million For Exposing Ericsson's Wrongdoings

  The Securities and Exchange Commission (SEC) awarded its largest-ever whistleblower award of $279 Million. Awards typically range between 10%-30% of collected monetary sanctions exceeding $1 Million. The SEC stated that an anonymous tipster's information and assistance helped broaden the scope of an ongoing investigation, in addition to providing multiple interviews and written submissions. Whistleblowers are rewarded for reporting wrongdoings Whistleblower awards are financial incentives offered by governments as an incentive to report wrongdoings. These rewards may be substantial and awarded under various laws; some allow anonymous reporting while others protect from employer retaliation. Whistleblower awards have proven an effective method for strengthening enforcement of anti-fraud legislation and dismantling fraudulent investment schemes. Reward amounts depend on several factors. One is the quality and quantity of original information provided, followed by total collected proceeds following reporting; these may include penalties, interest charges, additions to tax bills and any amounts provided under internal revenue law. A final consideration is how helpful and supportive a whistleblower was during investigations and prosecution of cases by authorities. Different countries define whistle-blowing differently and some set eligibility requirements; for instance, some only protect formal employees while others include contractors and consultants as well. Reward sizes also vary by jurisdiction - for instance, one whistleblower in the US received over $104 Million after revealing offshore tax havens; critics have pointed out these excessive rewards may not be warranted. One of the primary concerns raised about awards is that they compromise companies' compliance efforts, yet according to a working paper by Stockholm Institute of Transition Economics such fears are misplaced as most whistleblowers have already reported internally before filing claims under False Claims Act or filing claims in federal court have first alerted their supervisor. US law recognizes whistleblowers who voluntarily provide original information which leads to successful enforcement action as eligible for awards, with the CFTC having granted more than $30 million as rewards in past cases alone. Other cases have received equally substantial awards. The Commodity Futures Trading Commission's whistleblower programme is available to anyone who voluntarily discloses information related to a violation. To qualify for an award, this person must report original information resulting in $1,000,000 or greater monetary sanctions imposed by CFTC action as well as have authorization for further investigations or prosecution by them. They are rewarded for bringing the wrongdoing to light Whistleblowers play an invaluable role in our criminal justice system and should be compensated accordingly. By reporting fraud and corruption at their workplaces, whistleblowers take great risks with their careers and lives - sometimes being socially excluded or even fired due to their accusations of misconduct. Financial rewards provided to whistleblowers may help compensate for this and encourage employees to come forward with reports. Research has demonstrated that financial incentives can motivate whistleblowers to report, provided that rewards exceed expected punishment. Otherwise, employee utility will decrease and the program will fail. Furthermore, whistleblowers should have legal protection from retaliation as well as being allowed to negotiate settlements and eligible damage awards with ease. Whistleblowing is an integral component of criminal justice systems and saves taxpayer money. In the US, various programs reward whistleblowers who report government waste; one example being the False Claims Act's rewards program which pays out rewards when false claims made by government are reported - this can include health care claims made by contractors as well as defense contract waste reports. Additionally, the Securities and Exchange Commission (SEC) offers rewards to individuals who provide tips about violations of securities laws. Such violations could include insider trading, securities fraud or currency manipulation and could result in SEC enforcement actions leading to monetary sanctions being recovered; whistleblower awards from this award vary between 10%-30% of recovered amounts. Whistleblowers have helped the federal government recover billions in fraud and abuse of government funds in the past. Most recently, whistleblower rewards totaled $22.3 million, or an average award of 20% of what the government recovered through qui tam lawsuits. Furthermore, over half of state and local governments also offer similar programs with awards determined based on amounts recovered as well as legal fees or lost wage compensation awarded directly from this amount recovered; those with an emotional stake in an outcome of their cases can even receive larger awards than this figure. They are rewarded for helping the government recover money Many states and the federal government offer whistleblower reward laws that encourage private individuals to report any company or individual committing fraud against the government. These whistleblower laws, known as qui tam laws, allow whistleblowers to file lawsuits on behalf of the government in order to recover up to 30% of what the government recovers as rewards - in addition to protection provided by laws such as False Claims Act or other federal/state whistleblower laws. The value of a whistleblower award depends on various factors, including the severity and quality of wrongdoing committed by the defendant and quality of information provided by whistleblower. Typically, when public safety risks increase due to detailed reporting from whistleblowers and more assistance they provide in furthering a case; their award can increase. Past cases involving Medicare and Medicaid fraud have brought out some of the highest whistleblower awards. To be eligible for one of these awards, an individual must provide original information that is not publicly available - it must also be unique; two individuals could present identical data; only one will qualify for an award. Critics of whistleblower incentives argue that their high rewards could encourage false tips, undercutting government efforts to prosecute fraud and information fabrication. Furthermore, some feel incentives should come with severe penalties against false tips, perjury and information fabrication; however, according to research from Stockholm Institute of Transition Economics they do not lead to more false tips and actually increase reported violations by adding an incentive-reward scheme into play. Timeliness of reporting fraud by whistleblowers is also of great significance; earlier reporting increases the chances of government intervention and penalty imposition, while award amounts vary depending on whether the government joins the whistleblower lawsuit or not. Anytime someone suspects their employer or healthcare provider of Medicare/Medicaid fraud, it is wise to consult a whistleblower lawyer. At Constantine Cannon we have experience in handling state and federal whistleblower laws to assist individuals file claims for substantial rewards and legal protections. Call now to set up a confidential consultation! They are rewarded for helping the public Whistleblowers are essential in any free society, as they expose misconduct by companies and individuals that otherwise would go undetected. Many times whistleblowers have exposed fraudulent activity earlier than shareholders, regulators or auditors; even in cases of potential retaliation from employers they continue to risk their careers for the greater good of society. Countries offering generous rewards to encourage whistleblowing have found that offering large rewards has had a substantial effect on the amount of information reported. However, it must be balanced against an effective deterrent in order to prevent false tips. Incentives must also be balanced against severe sanctions for defamation, perjury and information fabrication. U.S. whistleblowers who report illegal activities to the government are rewarded with a percentage of any funds recovered, thanks to laws passed following the financial crisis: the Dodd-Frank Act established SEC and CFTC whistleblower awards programs as well as state False Claims Acts which address cases involving federal funds fraud. Critics claim that whistleblower reward programs will create perverse incentives, yet studies have demonstrated otherwise. Instead, whistleblower reward programmes have proven their worth as cost-effective means of combatting crime detection and prevention. Buccirossi, Immordino and Spagnolo conducted a study that revealed whistleblowers who received rewards were more likely to file lawsuits, bring their cases forward for trial and win their claims than those not receiving rewards. Their results corroborated with those from another research paper which looked at 1,600 whistleblowers; those receiving awards filed more lawsuits with more serious allegations than non-rewarded whistleblowers. Whoever knows of violations of law should seek legal advice immediately. There are stringent requirements in order to qualify for rewards from government entities like SEC or CFTC - for example, providing original information voluntarily may help, provided your submission was the first ever received by them.