On March 7, 2024, Deputy Attorney General Lisa Monaco announced that the U.S. Department of Justice (“DOJ”) is creating a pilot whistleblower rewards program, which will be developed and implemented over the next 90 days, with a formal start date to be announced later in 2024.

According to the announcement, individuals who assist the DOJ in “discover[ing] significant corporate or financial misconduct” could be eligible under the program to receive a portion of any resulting forfeiture.  The stated goals of the program are to “create new incentives for individuals to report misconduct to the [DOJ]” and “drive companies to invest further in their own internal compliance and reporting systems.” 

As a reminder, the DOJ has statutory authority under 28 U.S.C. § 524 (c)(1)(C) to pay awards for “information or assistance leading to a civil or criminal forfeiture.”  As frequently discussed on this blog, other federal agencies, such as the SEC and CFTC, have implemented similar whistleblower rewards programs, and we have reported on several enormous awards handed out under those programs, including a record-shattering $279 million award announced last year.  The announcement noted that the DOJ’s program is designed to improve upon and supplement this “patchwork quilt” of initiatives.

While the details of the program will be sorted out in the coming months, the announcement laid out some “basic guardrails.”  Specifically, the DOJ would only offer payments to whistleblowers:

  • (i) after all victims have been compensated properly;
  • (ii) to individuals who submit truthful information that is not already known to the government;
  • (iii) to individuals who are not themselves involved in the alleged criminal activity; and
  • (iv) in cases where there is not “an existing financial disclosure incentive,” which includes qui tam or other federal whistleblower programs.

The DOJ made clear to potential whistleblowers that it will accept information about violations of all federal laws, but would be particularly interested in targeting violations related to “[c]riminal abuses of the U.S. financial system,” “[f]oreign corruption cases outside the jurisdiction of the SEC, including FCPA violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act,” and “[d]omestic corruption cases, especially involving illegal corporate payments to government officials.”

The next day, on March 8, 2024, Acting Assistant Attorney General Nicole Argentieri discussed the initiative in greater detail.  Argentieri stated that the DOJ’s Money Laundering and Asset Recovery Section (“MLARS”) would be partnering closely with U.S. Attorneys, the FBI and other DOJ offices to develop guidelines for the program.  Argentieri also reiterated that the DOJ anticipates the program will be useful in “developing foreign corruption cases that are outside the jurisdiction of the SEC, including FCPA violations by non-issuers.”  As another possible guardrail, Argentieri added that the DOJ expects to establish a monetary threshold to be eligible for rewards under the program, which could be similar to the current threshold in the SEC and CFTC whistleblower programs of at least a $1 million agency sanctions order.

Takeaways

With this announcement, the DOJ is giving whistleblowers strong incentives to disclose potential violations of federal law as early as possible, so as to be eligible for rewards under the soon-to-be implemented program.  Based on the DOJ’s statements on what sorts of violations it will focus on, we anticipate seeing a rise in federal prosecutions under various laws over the next few years that do not fall under the more limited jurisdiction of the SEC or CFTC.  As always, we will monitor this important development and report on any updates.

Posted in DOJ, Whistleblower
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Read more about Steven J. Pearlman
Show more Show less
Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims.

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.

Read more about Pinchos Goldberg
Show more Show less
Related Posts
Study: Does The Existence Of Whistleblowers In Enforcement Actions Mean Greater Penalties?
November 5, 2014
Words Matter: Three Key Steps to Mitigate SEC Enforcement Risks Relating to Whistleblower Carveout Language
October 18, 2023