How Do Whistleblowers Get Paid?

There are many ways to get compensated for reporting fraud, and there is a system to help whistleblowers receive this compensation. If you are concerned about your own business, you can work with the SEC, IRS, and Commodity Futures Trading Commission to get compensation for exposing a fraudulent practice. Follow these steps to get the best reward possible. But first, consider who will pay you. Generally, government entities will pay whistleblowers 15 to 30 percent of the amount recovered.

SEC

SEC whistleblowers receive payments to reveal misconduct in securities and financial markets. Last week, the SEC announced it awarded $40 million to four whistleblowers. Typically, the Commission pays whistleblowers 10 to 30 percent of the government recovery when monetary sanctions are over $1 million. In this case, the SEC and another agency jointly awarded the whistleblowers $37 million each. The rewards are significant, and whistleblowers are in a unique position to interpret the evidence and make the correct interpretation of the information.

The SEC whistleblower program has been successful since 2012, awarding more than $735 million to 127 whistleblowers. The average award is $5.7 million. Since then, the SEC has paid out nearly $100 million in awards to whistleblowers, demonstrating the SEC’s commitment to enforcing the securities laws. However, SEC whistleblowers must provide credible tips, in a timely manner, to receive these rewards.

In the past year alone, the SEC received over 52,400 tips from whistleblowers. Since the program launched in 2011, it has led to numerous enforcement actions, resulting in more than $4.8 billion in monetary sanctions for wrongdoers. With that, the SEC Whistleblower Program has been instrumental in exposing significant investment fraud schemes. If you’re interested in becoming an SEC whistleblower, you can learn more about the process and how you can apply.

IRS

IRS whistleblowers get paid when they uncover illegal activity by IRS employees, contractors, or agents. The rewards vary and depend on what kind of information was provided and how useful the information was in prosecuting the case. The more documentation you have, the higher your chances of collecting a reward. However, whistleblowers should be aware that they must provide confidential information. If you do not have this information, you may be eligible for a lesser reward.

In order to receive a reward, an IRS whistleblower must have knowledge of illegal tax practices. Often, the individual will be an employee, an auditor, or an accountant. But federal employees do not qualify. Instead, the person must have obtained the information from his or her job or have been convicted of a tax fraud crime. To qualify for an award, you must have a substantial amount of evidence and be willing to provide accurate information to the IRS.

The IRS offers rewards of up to 30% of the recoveries of tax fraud. To qualify for the reward, you must be an individual taxpayer with at least $200,000 in gross income. The award amounts are smaller for claims made from public sources. And the payment amount may be smaller if the individual taxpayers are foreign nationals. Despite the low rewards, the rewards can add up. And the best part is, these payments are not limited to U.S. citizens. Foreign citizens often make up a significant portion of IRS Whistleblower submissions.

Commodity Futures Trading Commission

A recent award of nearly $200 million to a whistleblower by the Commodity Futures Trading Commission was made possible by the whistleblower’s credible information. The whistleblower’s information was used to open investigations that led to a successful enforcement action. The whistleblower also helped CFTC secure two related enforcement actions from foreign regulators. The payout for whistleblowers is an incredible example of the value of reporting a breach of government regulations.

In order to claim payment for a whistleblower’s tip, an individual must submit a completed Form TCR to the CFTC. The form can be submitted electronically on the CFTC’s website, mailed, or submitted through an online portal. The Form TCR should be as detailed as possible and include all documentary evidence, if applicable. If the whistleblower is anonymous, an attorney must file the claim. The attorney must obtain proof of identity.

The SEC’s whistleblower program has been phenomenally successful. Whistleblowers have received almost $5 billion in monetary sanctions in recent enforcement actions. Almost $1.3 billion of these monies was returned to investors as a result of whistleblowers’ efforts. In 2010, the Dodd-Frank Act established the SEC and CFTC whistleblower programs. In addition to offering whistleblowers confidentiality, the Act also allows whistleblowers to claim double back pay and litigation costs.

from lawyers.buzz https://lawyers.buzz/how-do-whistleblowers-get-paid/
via IFTTT