WHISTLEBLOWING AND CRIMINAL ANTITRUST CARTELS: A PRIMER AND CALL FOR REFORM
By Robert E. Connolly and Kimberly A.Justice1
Sam E. Antar, Former Crazy Eddie CFO, former CPA, and a convicted felon2
We are currently in the heyday of government prosecuting agencies using whistleblowers as a means of exposing frauds that are difficult to detect without the aid of an "insider." News outlets routinely report on record breaking awards made by the Securities and Exchange Commission ("SEC") to whistleblowers who blow the whistle on financial fraud. SEC whistleblowers can be eligible for an award when they voluntarily provide the agency with "original, timely, and credible information" that leads to a successful enforcement action.3 Awards can range from 10 percent to 30 percent of the money collected when penalties are more than $1 million.4 The SEC has awarded more than $300 million to whistleblowers since the inception of the agency’s whistleblower program5 including a recent award of $500,000 to an overseas whistleblower.6 More than $2 billion in monetary sanctions have been ordered against wrongdoers based on actionable information provided by whistleblowers since the program’s inception.7 The Commodity Futures Trading Commission ("CFTC")8 and Internal Revenue Service9 have also made large awards to whistleblowers whose cooperation has resulted in large settlements.