Federal government offering big rewards to financial whistleblowers

In the wake of the financial crisis, disturbing stories started to emerge about fraud and misconduct at some of the nation's largest financial institutions. For the most part, these abuses were brought to light by brave employees who had the courage to report inappropriate behavior to federal authorities.

These so-called whistleblower claims are a very important part of the U.S. justice system. Often, employees are in a much better place to detect misconduct than law enforcement officials or regulators are.

Of course, bringing a whistleblower claim has its risks: speaking out against one's employer is hard, even with federal whistleblower protection laws in place. However, it also has significant rewards. In addition to the peace of mind that comes with having done the right thing, whistleblowers are entitled to a share of the money the federal government recovers in penalties and disgorgements.

SEC pursuing new whistleblower program

A year ago, the U.S. Securities and Exchange Commission started a new whistleblower program designed to root out securities fraud and other financial violations. As part of that program, the SEC has set aside $452 million to pay rewards to whistleblowers whose tips lead to a successful enforcement action.

Under the program, whistleblowers are entitled to receive between 10 and 30 percent of SEC recoveries that exceed $10 million.

The rewards are available to whistleblowers who provide the SEC with high-quality, original information. So far, the response has been better than expected. In the first year of the program, the SEC received 2,870 tip - an average of eight per day. These aren't just anonymous phone calls. Whistleblowers have been turning over boxes of documents, email records and even audio recordings.

Protection from whistleblower retaliation

The federal government makes a concerted effort to protect whistleblowers' identities. Still, many people are afraid to come forward because they worry about the personal and professional fallout that could come from reporting their employer's misconduct.

Both federal and state law protects employees from being retaliated against for making a valid whistleblower claim. Employers cannot fire, transfer or demote an employee for reporting misconduct, nor can they harass an employee or create a hostile work environment.

Of course, the fact that these prohibitions exist does not mean that some employers won't engage in unlawful retaliation. When this happens, the aggrieved employee has a right to seek damages in a whistleblower retaliation lawsuit. Depending on the nature of the retaliatory conduct, the employee may recover damages for losses including back pay and emotional duress.

If you're considering making a whistleblower claim, it is always good to talk to an attorney first. An attorney can help you present your claim in the most effective way and can make sure your rights are protected.

If you have already made a whistleblower claim and you are now facing retaliation from your employer, know that you are not alone. An employment attorney can help you recover for the harm that has been done to you.