
Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Author: Dan Brecher
Date: March 16, 2015
Counsel
212-286-0747 dbrecher@sh-law.com“New York has a unique opportunity to set the gold standard for states seeking to expose and hold individuals accountable for financial crimes. This law will be the strongest, most comprehensive in the nation, and is long overdue for a state with the world’s most important financial markets,” Schneiderman said in a press statement. Attorney General Schneiderman’s proposed whistleblower statute is modeled after the SEC’s bounty program. As previously discussed on the Scarinci Hollenbeck Business Law Blog, the SEC whistleblower program is going strong. The agency received 3,620 whistleblower tips in FY 2014, which represents a more than 20 percent increase in the number of whistleblower tips in just two years. Last September, the SEC authorized its largest payout to date, an award of more than $30 million to a whistleblower who provided key original information that led to a successful enforcement action.
The proposed New York whistleblower program would specifically provide financial compensation to whistleblowers who voluntarily report fraud in the banking, insurance, and financial services industries, and whose tips lead to more than $1 million in penalties or settlement proceeds. Whistleblowers would be eligible to receive 10-30 percent of the money obtained.
As with similar whistleblower programs, the proposed law would also guarantee the confidentiality of the whistleblower’s information. In addition, current and prospective employers would be expressly prohibited from discharging, demoting, suspending, or otherwise harassing employees who report suspicious or fraudulent activity to supervisory or internal compliance staff.
With regard to logistics, a Financial Services Whistleblower Awards program would be created within the State’s Department of Financial Services to reward whistleblowers for tips to that agency. Payments to whistleblowers would be funded from monetary recoveries paid by wrongdoers and not from state funds.
In order to be implemented, the New York State legislature must approve the bill. We will be closely tracking the status of the proposal and will provide updates as they become available.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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