All whistleblowers face the real risk that they will be retaliated against by those they accuse of wrongdoing. If and when that happens there are laws whistleblowers can use to fight back. Dodd-Frank’s anti-retaliation provisions add to the growing body of law providing whistleblowers recourse when they face retaliation for reporting fraud and other wrongdoing. For some, however, fighting retaliation after the fact is too little too late. They’ve already suffered irreparable damage once the retaliation has happened. The prospect of being demoted, fired, blackballed or otherwise marginalized for reporting wrongdoing is enough to deter many potential whistleblowers from coming forward at all. Weighing all the pros and cons, they decide it just isn’t worth the risk. This was true before the Economic Crisis where people who could not afford the personal risk of retaliation did not come forward with information they knew about rampant fraud in the financial markets.
In Dodd-Frank Congress addressed this important obstacle to getting people to step forward with information about wrongdoing by creating mechanisms for whistleblowers to report credible information about possible violations of the securities or commodities laws without necessarily revealing their own identity. The confidentiality and anonymity protections built-in to Dodd-Frank are a ground-breaking step to help shield whistleblowers before retaliation can happen.
Both the SEC and the CFTC have committed to protecting the confidentiality of all whistleblowers, generally. They have agreed that they will not disclose the identities of whistleblowers in response to Freedom of Information Act (FOIA) requests. However, they may have to disclose a whistleblower’s identity to other agencies, or in court proceedings. A whistleblower who submits a Form TCR in his own name can, therefore, expect that the agency will not voluntarily disclose the whistleblower’s identity. There will still be a chance that his name may come out within the context of any investigation, or be inadvertently disclosed.
If that level of confidentiality is not enough, Dodd-Frank also allows individuals with information about potential violations to create entities which act as the actual whistleblower reporting the fraud. In this way, the identity of an actual person who may be subjected to retaliation is shielded. The corporate entity would appear in any documents the agency might have to produce to other agencies or courts. Even using a corporate form as the whistleblower, however, a whistleblower’s identity might still be discoverable.
For whistleblowers who fear being blackballed in their industry if they get labeled as a snitch and want the assurance of total anonymity, Dodd-Frank also created a mechanism allowing the whistleblower to submit the Form TCR completely anonymously.
Under the SEC rules, a whistleblower who wants to submit anonymously must have an attorney who represents the whistleblower in connection with the submission. The whistleblower must provide the attorney with the completed Form TCR signed under penalty of perjury at the same time the whistleblower (or the whistleblower’s attorney) provides the SEC with the anonymous Form TCR.
Under the CFTC’s rules, the whistleblower can file the Form TCR anonymously with or without the help of an attorney. However, under the CFTC’s rules, the anonymous whistleblower must provide the government a way to contact the whistleblower. In effect, if the anonymous CFTC whistleblower does not work through an attorney, the CFTC will have to have some information that can be connected back to the whistleblower.
Ultimately, if the whistleblower’s tip leads to an enforcement action which makes the whistleblower eligible for an award, even the anonymous whistleblower will need to disclose their identity before the money is awarded. However, even then, the relevant agency will not publicly disclose to whom they made the payment unless the whistleblower agrees. This provision has already been invoked successfully. One of the four awards announced in 2013 was made to a whistleblower whose name was never disclosed to the public.
Even though the Dodd-Frank whistleblower programs have been designed to be easy to use and “whistleblower-friendly,” reporting violations of the securities or commodities laws involves complicated strategy decisions and layers of choices about what evidence to present, when to present it, and how best to protect the whistleblower throughout the process. This may involve a decision to proceed anonymously. If you would like to learn more about the Dodd-Frank whistleblower programs, or would like to be a Dodd Frank whistleblower, the whistleblower lawyers at Keller Grover LLP can help you. The lawyers at Keller Grover understand whistleblower laws, including laws to protect the whistleblower, and strive to achieve the best possible results for their clients.