The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is perhaps the most significant financial regulatory reform legislation in the United States since the Great Depression. The Dodd-Frank Act has many different provisions, primarily dealing with oversight and regulation of financial companies, as well as providing for significant changes to corporate governance and the securities market.
Within the Dodd-Frank Act are regulations that are designed to combat corrupt practices by public companies with operations abroad. Of great interest is a whistleblower provision that is designed to reward and protect individuals who expose securities violations to the Securities and Exchange Commission (SEC), including offenses that violate the Foreign Corrupt Practices Act (FCPA). The FCPA is jointly enforced by the SEC and the Department of Justice.
The Dodd-Frank Act requires the SEC to reward whistleblowers who provide them with “original information” that leads to a successful enforcement action resulting in a fine of more than $1 million. SEC rules define a whistleblower as someone who possesses a “reasonable belief” that the information they are providing relates to a possible securities law violation that has occurred, is ongoing, or is about to occur. The information must be from the whistleblower’s independent knowledge, not already known by the Commission, and not from publicly available sources, such as governmental reports, hearings, or the news media. However, an independent analysis of publicly available information by the whistleblower may reveal new information that could qualify the whistleblower for an award.
The amount of the award must be at least 10 percent, but not more than 30 percent, of the monetary sanctions collected by the SEC. Within these limits, the size of the award is at the discretion of the SEC, but the Commission will consider;
SEC rules drafted to implement the Act also affect the amount of the award. Awards can be increased if the whistleblower first provides the information to his or her company’s internal compliance and reporting system and the company then provides information to the Commission that leads to a successful judicial or administrative action. Under this rule, the whistleblower is credited not just with the information they provide to the company, but with all the information the company provides to the SEC. Separate smaller enforcement actions that together total over $1 million may be treated as one action if they stem from the same set of facts. This allows a whistleblower to be rewarded in some cases even when an SEC action results in a fine less than $1 million.
Whistleblowers may submit information to the SEC anonymously but they must be represented by an attorney and provide the Commission with the attorney’s contact information. Though there are some exceptions, in general the Commission is not permitted to disclose information that could reveal the identity of a whistleblower.
The Dodd-Frank Act also contains provisions that protect whistleblowers against retaliation by their employers. The act states that employers may not discharge, demote, suspend, threaten, harass, or discriminate against Dodd-Frank whistleblowers for lawfully providing information to the Commission or assisting in its investigation or action based on the information. Anti-retaliation provisions of the Dodd-Frank Act apply to whistleblowers regardless of whether they ultimately qualify for an award.
FCPA whistleblowers are an important weapon in the government’s fight against fraud and they hold businesses and corporations accountable for their actions. With the passage of the Dodd-Frank Act, those who report violations of the Foreign Corrupt Practices Act could receive SEC awards in the millions of dollars.
With these strong financial incentives in place, more and more FCPA whistleblowers will undoubtedly discover that doing what’s right can also be very rewarding.
Call (310) 207-3233 or fill out the online form to get in touch with our whistleblower attorneys.
"Wisner Baum gave exceptional attention to all aspects of the case, detailed inquiry, and tenacious overview of all the information submitted. The paralegals are efficient and diligent. I was completely surprised to find an empathic personal message to take care of my own health during the challenging time of being a full-time caretaker.*"
In May of 2019, the jury in the case of Pilliod et al. v, Monsanto Company ordered the agrochemical giant to pay $2.055 billion in damages to the plaintiffs, Alva and Alberta Pilliod, a Bay Area couple in their 70s. R. Brent Wisner served as co-lead trial attorney for the Pilliods, delivering the opening and closing statements and cross-examining several of Monsanto’s experts. Wisner Baum managing shareholder, Michael Baum and attorney Pedram Esfandiary also served on the trial team in the Pilliod case.
The judge later reduced their award to $87M. Monsanto appealed the Pilliod’s verdict which the California Court of Appeal for the First Appellate District denied on August 9, 2021. Monsanto then requested the California Supreme Court review the appeal’s court decision, which the court denied on Nov. 17, 2021. Monsanto (Bayer) then submitted a petition for a writ of certiorari with the U.S. Supreme Court which SCOTUS denied on June 27, 2022, allowing the final judgment of $87M to remain intact.
$289.2 million jury verdict in Monsanto Roundup trial
Wisner Baum co-represented Dewayne “Lee” Johnson in the first Roundup cancer lawsuit to proceed to trial. On Aug. 10, 2018, a San Francisco jury ordered Monsanto to pay $39.25 million in compensatory damages and $250 million in punitive damages to Mr. Johnson, a former groundskeeper who alleged exposure to Monsanto’s herbicides caused him to develop terminal non-Hodgkin lymphoma.
Months after the jury verdict, the judge overseeing the trial reduced the punitive damages to $39.25 million. Mr. Johnson decided to accept the remittitur, bringing the adjusted amount awarded to Mr. Johnson $78.5 million.
Monsanto (Bayer) appealed the verdict and Johnson cross appealed. On July 20, 2020, the First Circuit Court of Appeals upheld the verdict against Monsanto but reduced Mr. Johnson’s award to $20.5 million. The company chose not to take the case to the U.S. Supreme Court, ending the litigation.
In 2016, Wisner Baum attorney Timothy A. Loranger and six other attorneys in the Plaintiffs’ Management Committee were able to secure a $265 million settlement for victims of the 2015 Amtrak 188 derailment in Philadelphia, one of the largest in the U.S. for 2016.
