Article by John Joy, Managing Attorney, FTI Law.
Edwards Lifesciences (NYSE: EW) recently disclosed that the Company was investigating whether payments made by employees in Japan violated the Foreign Corrupt Practices Act (“FCPA”). What this means is that Edwards Lifesciences is investigating whether employees in Japan engaged in bribery. While that may seem like an odd thing to happen at a prestigious medical company, it is not uncommon given that U.S. authorities have a very broad definition of what constitutes “bribery.” If you are an employee at a company like Edwards Lifesciences, here are 5 things you need to know about whistleblowing:
1. The FCPA Is An Easy Law To Break
The FCPA deals with situations where a company gives something of value to a “public official.” In countries like Japan, where hospitals are run by the government, even doctors are considered “public officials.” If Edward Lifesciences was giving anything of value to doctors (that can include expensive dinners) they may have violated the FCPA. U.S. authorities take a very hard line on this, and even giving money to a charity linked to a doctor could lead to an FCPA fine.
2. Foreign Whistleblowers Are Eligible For Awards
If you haven’t already heard, whistleblowers who provide information to the SEC can be rewarded with up to 30% of the fine that the company pays. The SEC are also very interested in FCPA violations like the one being investigated at Edwards Lifesciences. The average SEC award is over $4 million and the highest award so far (paid last year) was over $100 million. For employees in foreign countries such as Japan, you might be wondering whether you qualify for the whistleblower rewards program, and the answer is most likely: Yes. There are no restrictions on foreign individuals claiming awards, and the SEC has already paid out a number of foreign claimants. If you’d like to find out quickly if you qualify for an award take our free online evaluation here.
3. You Can Report Even After An Investigation Has Started
Even if the authorities are already investigating a company (like Edwards Lifesciences) it’s never too late to become a whistleblower. When a company is already under investigation, you can still receive an award for providing information which helps the authorities in their investigation. Not only is that the stated policy of the SEC, but they also demonstrated it when they paid a whistleblower $3.5 million for providing information in an investigation they had already started.
4. People Involved In The Wrongdoing Can Still Get An Award
People who are involved in wrongdoing often think that they are not eligible for an award, this is incorrect. The SEC is only allowed to reduce the amount paid to a whistleblower if they are involved in the wrongdoing. For example, in 2018, the SEC made a payment to a whistleblower even though the individual had been involved in the misconduct. Rather than receiving the maximum 30% payout, the individual received 20%.
However, while a whistleblower involved in the misconduct might be eligible for an award, it doesn’t give them immunity from prosecution. That’s why if you were involved in wrongdoing that you wish to report, it’s important that you speak to an attorney before submitting any information.
5. Reporting Internally Won’t Affect Your Ability to Claim An Award – Provided You Act Fast
If you choose to report misconduct within your company, such as to your boss or to the Compliance Department, you can still claim an award provided you report the information to the SEC within 120 days of reporting to the company. Whistleblowers who have spoken with their company about misconduct should speak to an attorney immediately to make sure they don’t lose out on the possibility of claiming an award.
If you’d like to learn more about whether you qualify for a whistleblower award, take our online evaluation here. Or if you’ve read anything in this article that applies to you click here to speak with an attorney free of charge.