In May, the U.S. Second Circuit Appeals Court ruled that the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) must review a case in which they denied a whistleblower reward claim.
Victor Hong was a risk manager at the Royal Bank of Scotland (RBS) and sued the DOJ and the SEC in February. Hong alleged that “they flouted the law ‘in bad faith’ when assessing whether he was due a payout for helping federal probes into the British bank’s mis-selling of mortgage bonds in the run-up to the 2007-08 financial crisis.”
According to Reuters, RBS agreed to pay $4.9 billion to end the DOJ and SEC investigations in August of 2018 “no portion of that fine has ever been deemed eligible for a reward under the whistleblower program.”
Hong’s complaint also requests the DOJ and SEC to disclose documentation from the RBS settlement “and to deem it eligible for a potential tipster reward.” Whistleblower attorney Siri Nelson, of the whistleblower law firm Kohn, Kohn, and Colapinto, said the court’s decision in Hong’s case “sets a powerful precedent for whistleblowers who participate in federal investigations.” She surmises that this review will help clarify how whistleblower awards are determined when they have played a role in a “successful investigation.”