Individuals facing bribery allegations may have motivated a whistleblower to seek compensation by submitting a tip to law enforcement officials. The Foreign Corrupt Practices Act allows U.S. government entities to offer a financial award between 10% and 30% of the amount collected.
The U.S. Securities and Exchange Commission has paid out large awards related to tips involving publicly traded companies. According to Compliance Week, the SEC has paid out more than $900 million for tips on violations of the FCPA.
A desire for government payouts may initiate investigations
A whistleblower may remain anonymous throughout the investigation process. A company insider, an investor or a financial analyst with access to books and records may have an incentive to disclose private contents to law enforcement officials.
He or she may begin by searching for clues about executives and their professional associations in foreign countries. For example, when a company’s financial statements appear lackluster, a whistleblower may try to find a reason, such as an alleged concealed transfer to a foreign official. If a perceived wrongdoing could lead to a financial windfall, a whistleblower may grow eager to submit evidence to a U.S. government entity for an investigation.
The SEC may initiate enforcement actions
Typical bribery cases may include payments to foreign public officials in exchange for business contracts or connections. According to the SEC, a company’s accountants, executives, directors and employees could face civil and criminal actions. Penalties may include giving up profits gained through publicly traded securities.
Both companies and individuals may face financial repercussions when a prosecutor can prove a violation to the court. Proof of an FCPA violation may result in a whistleblower receiving a generous payout when U.S. government sanctions or penalties surpass $1 million.
