Gemäß dem Dodd-Frank Act erhalten „Verräter“ zwischen 10% und 30% der von der U.S. Securities and Exchange Commission realisierten monetären Sanktionen. Eine starke Motivation….United States: The Extraterritorial Reach of the New Dodd-Frank Whistleblower Law; Article by Luis R. Mejia and Grayson D. Stratton
Whistleblowers who assist the US Securities and Exchange Commission, including those residing outside the US, may receive substantial bounties under the new whistleblower provisions of the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Because the new whistleblower provisions have extraterritorial reach, entities operating outside the US are at risk of increased whistleblower activity which may lead to scrutiny by the SEC and US Department of Justice, civil and criminal law enforcement actions and exposure to retaliation claims.
The new whistleblower law
Under Dodd-Frank, any securities whistleblower that provides „original information“ – meaning information that is „derived from the independent knowledge or analysis of the whistleblower“ and „is not known to the Commission from any other source“ – will be eligible to receive a bounty in a related SEC case that results in monetary sanctions over $1 million in aggregate. Dodd-Frank § 922. Whistleblowers are entitled to receive a minimum of 10 percent and as much as 30 percent of the monetary sanctions collected by the SEC, creating a powerful incentive for individuals to turn over information to the SEC relating to perceived corporate wrongdoing, particularly relating to financial reporting or violations of the Foreign Corrupt Practices Act. For example, an informant in an FCPA case resulting in sanctions similar to those in the U.S. government’s settlement with Siemens would receive an award of between $80 million and $240 million. The significant incentives under the new law to report perceived wrongdoing are bound to result in increased whistleblower activity, including outside the US, which may lead to action by U.S. law enforcement authorities.
International application of the whistleblower law
The new whistleblower law does not restrict the types of persons who can receive a bounty, with the exception of certain auditing firm and law enforcement personnel. Thus, persons outside the US may be eligible. For example, a person deemed to be a „foreign official“ under the FCPA would be eligible to receive an award for reporting an offer of a bribe. Employees of foreign subsidiaries and affiliates of publicly traded companies are also eligible, and have new incentives to report perceived wrongdoing as a result of Dodd-Frank’s expansion of the pool of persons who can bring retaliation claims under the Sarbanes-Oxley Act.
Dodd-Frank’s new provision relating to the SEC’s extraterritorial jurisdiction of the antifraud provisions of the federal securities laws also increases the potential for whistleblower activity that could impact entities outside the US. The SEC’s jurisdiction under the antifraud provisions now includes „conduct occurring outside the United States that has a foreseeable substantial effect within the United States,“ as well as „conduct within the United States that constitutes significant steps in furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors.“ Thus, a whistleblower could be eligible for a bounty in cases brought by the SEC involving a non-US issuer, a non-US exchange transaction, and non-US investors. The broad extraterritorial reach of the SEC’s antifraud jurisdiction increases the likelihood of whistleblower activity outside the US. Because the SEC often works closely with the Department of Justice, any SEC enforcement action may also result in a parallel criminal action by DOJ.
International compliance tips
In light of the new whistleblower law’s increased awards and protections for whistleblowers, companies operating internationally should take steps to reduce the risk of increased whistleblower activity and resulting law enforcement action. Education and training of employees regarding the scope of the federal securities laws, particularly the FCPA, reduce the risk of employees reporting unfound or mistaken claims to the SEC in hopes of receiving a bounty. Effective internal reporting mechanisms, such as employee hotlines, and diligent follow-up by the company, reduce the risk of employees reporting their concerns to the SEC in the first instance. In addition, senior management should have an action plan in place to rapidly respond to the SEC and DOJ in the event a whistleblower triggers scrutiny, including guidelines for independent internal investigations.