How To Avoid The Pitfalls Of Becoming A Dodd Frank Whistleblower

The Dodd Frank Act introduced in July 2011 has seen a steady rise in the number of whistleblowers reporting on fraudulent and corrupt behavior happening within their workplace. In fact, according to the Department of Justice, 2011 saw 726 new cases being brought to the government's attention and a staggering figure of five hundred million dollars paid out as awards. The Frank Dodd Wall Street Reform and Consumer Protection Act, which is the Act's full name, authorizes the SEC (Security Exchange Commission) to reward citizens who report fraud within public companies to the tune of some 10-30% of the amount it recovers over $1 million. Now it doesn't take a mathematician to see that this could be a life-changing award in some cases, but before you commit to becoming a Dodd Frank whistleblower, it's worth taking certain steps so that you don't fall at the first hurdle.

Contact a lawyer before taking any sort of action

The SEC has made blowing the whistle on corporate fraud extremely easy to do and allows an individual to bypass the normal channels of complaint laid out within most large corporations. Instead, just a few short clicks can get the whole process rolling; the SEC website even divides the type of corporate fraud into sections with direct links to specific complaints. In contrast, to file a report with the IRS as a Frank Dodd whistleblower, an individual is required to mail in a form. However easy these processes may seem, the first piece of advise is to contact an experienced lawyer as soon as you can, certainly before filing a complaint with the Government and before making a formal complaint to your employer.

You could go it alone but don't!

In theory you could go it alone, pinning your hopes on the SEC or IRS taking your claim, pursuing to the bitter end, making sure you get your share of the award, and protecting you against retaliation. The harsh reality is that it's a bit more complicated than this. Whilst some sources claim that whistleblowing activities can ruin your life, in some cases it may be no worse than any normal business where, for example, a self-employed person may report fraud against an aggressive competitor. However, you can bet your bottom dollar that if you report someone else's fraud, even if the allegation doesn't go anywhere, that person is going to be pretty hacked off with you. This is where a whistleblower lawyer, who generally works on a contingency basis and therefore has no reason to pursue a losing case, comes into the equation.

What a whistleblower lawyer can do for you

Although in your eyes you may think you have an obvious case, call it cut and dried, there may be all sorts of problems that would only be apparent to an attorney, or even revealed during an attorney's investigation. Most contingent law firms reject around 90% of their cases and as a result everyone is better off for it, including the potential clients and the potential defendants. For example, if you were found to have a heart problem, you'd naturally want to get a second opinion, right? So why not get a first opinion from a whistleblower lawyer.

What if you do have a case?

What if your case does stack up? Why give a private attorney a large share of your profit (often around 40%). Wouldn't the government attorneys do most of the work?
It's fair to say that Government civil attorneys are overworked and understaffed and tend to only take on cases where they are certain they will win, plus they expect to have a lot of the evidence for the case handed to them as a package. They have to work with the resources they have unlike a private attorney who can call on a whole team of individuals with different areas of expertise. What's more the whole point of a Dodd Frank whistleblower statute is to encourage people outside of the government to help with enforcing the law.

Government lawyers aren't working for you
Going it alone and unrepresented isn't the best course of action. As an individual you won't have the resources or experience needed to navigate the investigation and put a case together for the government. In addition, once a case gets going, the government lawyers are working purely for the government and won't have your interests at heart. Their interest in the whistleblower only extends as far as prosecuting a successful case on the government's behalf. They're not interested in sharing the proceeds of any monetary recovery and only have a limited interest in offering protection.

Reasons for failure

Too many whistleblowers fall at the first hurdle by disclosing the fraud in the wrong way. Either by tripping over issues such as “original source” requirements or the “public disclosure” legalities of the False Claims Act.

The bottom line to becoming a successful Dodd Frank whistleblower therefore is to seek the advice of a well versed whistleblower attorney who will be with you every stage of the way to fight your corner and make sure that you get your just reward for your actions.