The Foreign Corrupt Practices Act (FCPA), enacted by Congress in 1977 and enforced by the Securities and Exchange Commission (SEC), is the most critical transnational anti-corruption law in history and has made the United States the world's lead enforcer against foreign bribery. Whistleblowers have had a considerable impact on the success of the SEC's FCPA enforcement program . They have received substantial awards for their successful tips. But in order to reap the benefits of their disclosures, FCPA whistleblowers must keep track of their cases by routinely checking the SEC's list of Notices of Covered Actions – press releases posted to the SEC website whenever a tip leads to a successful enforcement action – so that they can apply for an award and ensure that their contributions are acknowledged and compensated. Otherwise, FCPA whistleblowers risk missing out on millions.
The United States is currently the world's largest economy and has a significant role in international trading. Therefore, the US is prone to issues with bribery, especially overseas. Since 1977, the SEC has enforced the FCPA's powerful provisions to counteract these practices . It has enacted regulations to ensure adequate corporate governance and accountability. The main three cross-cutting issues that this law focuses on – corporate liability, enforcement, and detection – are crucial for the FCPA to function efficiently and effectively.
As of July 2019, the US has won 156 cases under the FCPA. The Organization for Economic Cooperation and Development (OECD) reports that the United States has sanctioned 174 companies and 115 individuals for foreign bribery or related offenses under the FCPA. It attributes this success to several enhanced techniques for discovering, investigating, and prosecuting foreign bribery, including whistleblower tips, media reports, and tips from tax authorities, financial intelligence units, international financial institutions, embassies, and foreign authorities. Media reports account for 15% of FCPA investigations, including both national and foreign media, and tax authorities have discovered between 10 and 12 percent of FCPA violations. But besides voluntary self-reporting, tips from whistleblowers and foreign authorities account for the largest sources for uncovering FCPA violations – 20% each.
The FCPA whistleblower program's success is attributable in large part to the enactment of the Dodd-Frank Act in 2010, which provides powerful incentives for whistleblowers to share information about foreign corruption. Besides anti-retaliation protections, FCPA whistleblowers under the Dodd-Frank Act have a chance of getting financial awards. This is possible if the information they provide the government is proven useful in obtaining sanctions. But not only does Dodd-Frank allow whistleblowers to collect awards through the SEC enforcement actions, but it also allows whistleblowers to collect through related actions. For example, successful criminal actions brought by the Department of Justice. In other words, not only are whistleblowers valuable to the enforcement of the FCPA, the FCPA can be highly lucrative for whistleblowers.
However, it is essential to note that just reporting a tip is not enough. Whistleblowers must monitor the Notices of Covered Action, posted on the SEC website, whenever sanctions are recovered on account of a whistleblower tip. Once a whistleblower identifies a notice for which they might be award eligible. Therefore, it is then incumbent upon them to apply for an award via Form WB-APP. There is currently no law requiring the SEC to directly notify whistleblowers of enforcement actions for which they might be award eligible, so it is imperative that whistleblowers consistently check the SEC website.
A review of FCPA Notices of Covered Action demonstrates a steady increase in the number of successful cases emanating from whistleblower tips between 2010 and 2020. Between the years 2011 and 2015, the SEC issued only 51 Notices of Covered Action. In the following five years, the number of notices increased by over sixty percent to a total of 83 notices. As the OECD and US authorities agree, and the uptick in Notices of Covered Action demonstrates, the Dodd-Frank's whistleblower incentives and protections will continue to increase the detection of FCPA violations and thus the number of awards that whistleblowers are qualified to receive. Therefore, it is all the more important that whistleblowers keep track of their cases to receive compensation.
To summarize, the SEC's enforcement of the FCPA has decreased foreign bribery and related crimes in the United States and worldwide. Whistleblowers play a crucial role in this success. But for whistleblowers to be compensated for their tips, they must keep track of the Notices of Covered Action posted by the SEC to determine if they are eligible for an award.
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