The DOJ rolled out its Corporate Whistleblower Awards Pilot Program this month. The initiative incentivizes whistleblowers who provide original, non-public information about corporate misconduct. If their tip leads to a DOJ enforcement action with a monetary forfeiture over $1 million, they could earn a slice of that pie—up to 30% of the first $100 million forfeited and 5% of anything beyond that, though no awards on amounts over $500 million.
Bridging the Gaps Left by Other Agencies
The DOJ’s program aims to “fill the gaps” left by existing whistleblower programs run by agencies like the SEC and CFTC. By targeting corporate crimes in financial institutions, foreign and domestic corruption, and healthcare fraud, the DOJ hopes to catch misconduct that other agencies might miss. DAG Monaco likened the initiative to “Wanted” posters of the Old West, emphasizing its role in uncovering hidden corporate crimes.
But the launch isn’t without its complications. The new program may inadvertently shift focus away from internal compliance mechanisms. Companies now face the challenge of balancing internal reporting systems with the allure of external rewards for whistleblowing. The DOJ has also amended its Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) to allow companies up to 120 days to self-report misconduct after receiving an internal whistleblower complaint, maintaining their eligibility for leniency even if the whistleblower has already gone to the DOJ.
Furthermore, the program aims to encourage whistleblowers to use internal channels by factoring in their participation in a company’s compliance program when deciding on awards. This move is intended to strengthen internal compliance systems and potentially make companies more attractive to whistleblowers.
The corporate world watches closely as the Corporate Whistleblower Awards Pilot Program debuts. The initiative represents a significant shift in how whistleblowing is incentivized and managed, posing opportunities and challenges for businesses navigating this new regulatory terrain.
