Here comes the ‘Decade of the Whistleblower’

 

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Two LeClaireRyan attorneys have recently pointed to a massive jump in claims from potential whistleblowers as a result of the Wall Street Reform bill that President Obama signed into law on July 21st. With plaintiffs receiving as much as 30% of settlements and fines that will typically exceed the $1 million mark it is expected in the legal community that activity in qui tam suits will rise significantly for some time creating a “decade of the whistleblower.”

While the Wall Street Reform bill addresses a number of facets in corporate crime it is the whistleblower provisions that seem to be over looked thus far.  The far reaching impact of these provisions are now being fest as more and more employees feel protected enough to do the right thing and stand up to systemic criminal behavior that exists in so many different areas of American business. Even the Foreign Corrupt Practices Act has seen recent violations that resulted in more than $100 million in fines.

The newly formed Bureau of Consumer and Financial Protection (BCFP) will administer the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new law covers all potential SEC and commodities trading violations whereas previous SEC whistleblower laws were limited to insider trading. Some attorneys have gone so far as to advise their white collar clients to stay current on professional liability policies as a reaction to the passage of Dodd-Frank.

Some complain that Wall Street Reform will basically deputize US citizens by giving such huge incentives to combat corporate crime. But many outside the rarified realm of the ultra rich corporate leader see many consumer benefits. The housing bubble, Enron scandal and routine food poisonings that require recalls can all be avoided by employees turned whistleblower.

When one time Enron vice president Sherron Watkins warned her bosses about the accounting scandal she was rewarded with inquiries about how to fire her. Now that Dodd-Frank is in place her situation would be very different today.

Over-compensated corporate chiefs may whine about the far reaching impacts of the Dodd-Frank Act and its whistleblower provisions, but the rest of America can rest assured that such lucrative incentives to tell the truth will more than likely result in fewer tax payer bailouts, safer food and more economically sound corporations. Here’s to hoping that it lasts longer than a decade.

http://www.chron.com/disp/story.mpl/editorial/outlook/7250194.html


http://www.property-casualty.com/News/2010/10/Pages/DoddFrank-Act-Requires-Keeping-PL-Policy-Current.aspx

http://www.prnewswire.com/news-releases/dodd-frank-to-usher-in-decade-of-the-whistleblower-attorneys-say-105170974.html

 
 
 

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