Financial reform includes new whistleblower program
Foreign Corrupt Practices Act Team Leader Don Zarin was quoted in a National Law Journal article titled, "Financial reform includes new whistleblower program."
The soon-to-be-signed financial reform package creates a new whistleblower program with potentially huge cash rewards for individuals who provide information about securities law violations to the U.S. Securities and Exchange Commission. Some corporate defense lawyers are calling it a "bounty" reward program because it covers violations of the Foreign Corrupt Practices Act, which lately has produced hundreds of millions of dollars in corporate penalties and settlements. "That's really significant," said Mr. Zarin. "There's been a dramatic increase in penalties by the SEC in the foreign corrupt practices area. It basically requires disgorgement of profits and that has resulted in some huge penalties – some over $300 million." Mr. Zarin estimates that more than half of SEC enforcement actions in this area are over the $1 million threshold. "This will really raise the bar on companies," he said.