The San Francisco Chronicle reports that the Corporate Whistle Blower Center-a national firm specializing in whistleblower advocacy and protection-recently urged Wall Street executives and managers who have substantial proof of securities fraud in their corporation to come forward with claims
Whistleblower lawsuits, also called qui tam lawsuit, and claims filed under the False Claims Act, which is a federal law permitting individuals to file suits against federal contractors engaged in fraud against the government. Whistleblowers who are successful with their claims receive a portion of the damages recovered by the government.
Under the Dodd Frank Wall Street Reform & Consumer Protection Act, offering substantial proof of violation of federal law can bring rewards from 10 percent to 30 percent of what the federal government recovers. The Corporate Whistle Blower Center estimates that violations could be as high as hundreds of millions of dollars or more in the mortgage and mortgage banking industry alone.
According to the Corporate Whistle Blower Center, those with information about violations of federal law should be careful about reporting the violations to their company, particularly if it is a Fortune 500 Company. Going to the company does not always end in heartfelt thanks on the company's part. Oftentimes those who come forward with evidence of violations are demoted to a lower position or "phased out."
There is also the issue of receiving the reward once the process is through. Sometimes whistleblowers with nobody to advocate for them have to deal with delays, confusion, and hang-ups in receiving their rightful reward.
Those considering filing a qui tam lawsuit are advised to consult a knowledgeable legal team before doing so, as there are multiple potential pitfalls along the way.
Source: San Francisco Chronicle, "Corporate Whistle Blower Center Urges Mortgage Banker Whistleblowers To Step Forward for a Potentially Huge Reward About Securities Fraud," 20 June 2011.