On February 29, the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower posted a Notice of Covered Action (NoCA) for a $100 million settlement with global software company SAP SE over charges of violations of the Foreign Corrupt Practices Act (FCPA).
The NoCA signals that the SEC is now accepting whistleblower award claims for the case. Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the SEC with original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government.
The SEC alleges that SAP engaged in bribery schemes in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan. According to the SEC, “SAP, whose American Depositary Shares are listed on the New York Stock Exchange, violated the FCPA by employing third-party intermediaries and consultants from at least December 2014 through January 2022 to pay bribes to government officials to obtain business with public sector customers in the seven countries mentioned above.”
The SEC further alleges that “SAP inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted.”
The Dodd-Frank Act, which established the SEC Whistleblower Program, extended whistleblower provisions to the FCPA. Individuals can disclose information relevant to potential FCPA violations to the SEC.
The SEC posts NoCAs for any enforcement action in which they collect at least $1 million. Whistleblowers then have 90 days to file an official whistleblower award application for the case.
In May 2023, the SEC issued a $279 million whistleblower award: the largest in the history of the SEC Whistleblower Program. According to reporting by the Wall Street Journal, the award was connected to a $1.1 billion FCPA settlement between Swedish telecommunications company Ericsson and U.S. authorities over bribery charges.
With its transnational reach, the SEC Whistleblower Program has attracted disclosures on foreign bribery and other violations from thousands of whistleblowers from across the globe. According to whistleblower advocates, however, the SEC’s whistleblower rules unfairly discriminate against international whistleblowers. Advocates are therefore calling on the SEC to revise its rules around the eligibility of whistleblowers who report to the media and through other channels.
Kohn sees the revision of the SEC’s eligibility rules as one of the seven most urgently needed whistleblower reforms. National Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on the SEC to revise its rulemaking.
Join NWC in Taking Action:
Reform the SEC Whistleblower Program
