New Financial Incentives For Whistleblowers

In a Client Alert, the Paul Hastings firm analyzes a pilot program by the Criminal Division of the Department of Justice (DOJ) that offers new financial incentives for whistleblowers and companies to report misconduct.

The program, developed by the Money Laundering and Asset Recovery Section, was unveiled on August 1, 2024. It targets criminal misconduct in areas not covered by another agency’s program and focuses on potential violations in financial crime, foreign bribery, domestic bribery, and healthcare fraud.

The client alert analyzes new elements in those four areas and recommends that companies consider them key enforcement priorities for the Criminal Division.

Among the detailed takeaways:

• More internal and external misconduct allegations can be expected, with the financial and healthcare sectors particularly likely to suffer from this increase.
• Companies should consider highlighting multiple reporting channels because they still need would-be whistleblowers to speak up internally, but they are now incentivized to take their concerns to regulators.
• Companies that impede anyone from communicating directly with the Criminal Division risk losing cooperation credit and other benefits. Therefore, they should highlight anti-retaliation policies and ensure that all employment and other agreements clarify that employees are always free to report to the government.
• General counsel and others with key roles in compliance programs must be aware that the possibility of a financial award might trigger many new internal allegations, which could require new procedures and resources to conduct expedited preliminary investigations.