In developing its new whistleblower award program, the U.S. Department of Justice (DOJ) should look to the best practices of the U.S. Securities and Exchange Commission (SEC) Whistleblower Program, says Allison Herren Lee, former SEC Commissioner and currently Of Counsel at the whistleblower firm Kohn, Kohn & Colapinto.
Lee commends the DOJ’s decision to develop a whistleblower award program and outlines the key elements of the SEC program in a new article “A Proven Success: The SEC Whistleblower Regime Provides a Roadmap for DOJ’s New Program” published by the Harvard Law School Forum on Corporate Governance.
“At the core of the SEC program is the reliable promise of a monetary award for qualified whistleblowers,” writes Lee. “History has demonstrated, time and again, that without guaranteed incentives, whistleblowers are far less likely to come forward. DOJ is in a great position to leverage the invaluable insight afforded by these historical examples as it shapes its new program.”
The Deputy Attorney General Lisa Monaco announced on March 7 that the DOJ was initiating a “90 day sprint” to develop a whistleblower award program. In announcing the program, Monaco pointed to the success of the whistleblower programs at the SEC and other agencies, noting that they “have proven indispensable.”
Lee experienced the critical role an effective whistleblower program can play in an agency’s enforcement efforts during her time at the SEC. She served as an SEC Commissioner from 2019 until her term expired in July 2022, during which she also served as the Acting Chair of the Commission.
In addition to transparent and reliable mandatory minimum awards, Lee outlines other key elements of the SEC Whistleblower Program which the DOJ Whistleblower Program should follow. These include anonymous and confidential reporting channels, a dedicated Whistleblower Office, and clear eligibility criteria.
“DOJ’s recent announcement is the latest in a series of thoughtful and wise approaches toward a goal we all support: fostering greater compliance with the rule of law in U.S. financial markets,” writes Lee in conclusion. “I strongly support this impending new policy, and hope that the successful SEC program will prove a useful example in its design.”
The points raised by Lee echo those made by National Whistleblower Center (NWC), which has sent letters to the DOJ urging them to follow the model of the Dodd-Frank Act whistleblower programs at the SEC and Commodity Futures Trading Commission (CFTC).
NWC is now urging the public to take action on the issue. It has issued an Action Alert allowing individuals to write to the DOJ to demand that the DOJ Whistleblower Program is implemented in a way that works for whistleblowers.
Further Reading:
A Proven Success: The SEC Whistleblower Regime Provides a Roadmap for DOJ’s New Program