Do whistleblowers have to be US citizens? | Pietragallo Gordon Alfano Bosick & Raspanti, LLP

The United States government has four primary whistleblower laws and reward programs:

  • The Federal Misrepresentation Act (“FCA”)
  • Securities and Exchange Commission (“SEC”) Whistleblower Program
  • The Internal Revenue Service (“IRS”) Whistleblower Program
  • The Commodity Futures Trading Commission (“CFTC”) Whistleblower Program

All of these whistleblower programs are pretty democratic. These programs allow non-US citizens to file a complaint in court (in the case of the FCA) or submit a report to an agency (in the case of the SEC, CFTC, and IRS whistleblower programs). ). Noncitizens, whether resident in the United States or abroad, are generally treated equally with US citizens under whistleblower laws and reward programs. Eligible whistleblowers can apply for and receive significant rewards under these whistleblower programs, regardless of nationality.

Available data shows that foreign citizens are an integral part of the whistleblowing system. And this is especially true for SEC whistleblowers. In fiscal year 2021 alone, the SEC received more than 1,300 tips from individuals in 99 foreign countries. Interestingly, the highest number of foreign tips came from Australia, Brazil, Canada, China, Colombia, Germany, India, Russia, Singapore, Turkey and the United Kingdom.

The critical importance of foreign whistleblowers to SEC law enforcement should come as no surprise. Many foreign companies list shares on US stock exchanges, thousands of US companies have significant operations overseas, and market participants around the world invest trillions of dollars in US securities.

Equally important, the SEC shares jurisdiction over the enforcement of the Foreign Corrupt Practices Act (“FCPA”) with the Department of Justice (“DOJ”). The FCPA prohibits a wide range of actors from bribing foreign officials and imposes certain related accounting obligations on covered companies.

There is no doubt that the SEC and the DOJ rigorously enforce the FCPA. The SEC and DOJ have special units dedicated to FCPA enforcement. Given the broad scope of the FCPA and the severe civil and criminal penalties associated with FCPA violations, annual FCPA recoveries are often in the billions of dollars. Foreign citizens often possess particularly valuable knowledge of FCPA violations, as such wrongdoings tend to occur in their home soil.

Similarly, non-nationals may have key information regarding violations of tax laws under the IRS Whistleblower Act (e.g., abusive tax shelters), commodity violations and derivatives marketed by the CFTC (for example, manipulation in the oil futures market) and health care. and government contractor fraud (eg, health insurance fraud) covered by the FCA.

Major whistleblower programs in the United States offer substantial monetary rewards to eligible whistleblowers as well as various protections for whistleblowers. In passing these laws, Congress no doubt realized that foreign citizens can provide critically important information to regulators. As the already massive operations of US multinational corporations expand, the importance of foreign whistleblowers will also increase.

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