DOJ Plans Rewarding Whistleblower Program – Mintz Health

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TL/DR –

The US Department of Justice (DOJ) is developing a whistleblower rewards program. The initiative is designed to incentivize people to disclose significant corporate or financial misconduct not already known to the DOJ, with whistleblowers who supply truthful, original information potentially qualifying for a share of the resulting forfeiture. The program is intended to boost the DOJ’s policies that encourage voluntary self-disclosure of misconduct, with the availability of a monetary reward for whistleblowers expected to increase the chances of the government being alerted to misconduct.


DOJ Announces Development of Whistleblower Rewards Program

During the American Bar Association’s 39th National Institute on White Collar Crime in March 2024, Deputy Attorney General Lisa Monaco made significant remarks regarding the Department of Justice’s (DOJ) policy initiatives. She highlighted themes like individual accountability, the importance of robust corporate compliance programs, incentivizing voluntary self-disclosure of misconduct, and adapting to disruptive technologies, indicating a continued focus on corporate enforcement in 2024.

Whistleblower Rewards Program Highlights

Monaco noted the successful execution of whistleblower programs by the Securities and Exchange Commission and Commodity Futures Trading Commission, despite their limited jurisdiction. She compared existing mechanisms to a “patchwork quilt” that misses certain categories of misconduct. In response, the DOJ is designing a whistleblower rewards program, providing incentives for individuals who expose significant, unknown corporate or financial misconduct. Specific program details are forthcoming, but the outline includes rewarding whistleblowers only after victims receive full compensation, and excluding individuals involved in the reported criminal activity.

Additional Context and Program’s Connection to DOJ’s Self-Disclosure Initiatives

In a follow-up speech, Acting Assistant Attorney General Nicole M. Argentieri elaborated on the program’s purpose to close current gaps. She reinforced that rewards would only be offered where no existing incentives for disclosure are present. Domestic corruption cases, criminal abuses of the U.S. financial system, and foreign corruption cases outside SEC’s jurisdiction are of particular interest to DOJ.

The whistleblower program is also crafted to support DOJ’s efforts to boost voluntary self-disclosure of misconduct. With the possibility of a monetary reward, this initiative increases the risks for companies considering whether to self-report misconduct. The rewards program may also expedite a company’s decision to self-disclose to preserve the associated benefits. The DOJ aims to create a “multiplier effect”, encouraging both companies and individuals to promptly disclose misconduct.

Next Steps and Implications

The DOJ plans a “90-day sprint” to develop and implement a pilot of the whistleblower rewards program. The DOJ’s Money Laundering and Asset Recovery Section will play a major role in creating the pilot program, with collaboration from other DOJ offices and the Federal Bureau of Investigation. Monaco also hinted at additional guidance regarding voluntary self-disclosure.

The forthcoming specific standards will be significant but the DOJ’s focus is clear—it aims to encourage those with knowledge of corporate misconduct to swiftly report what they know.

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