Business World

Sunday 17 December 2017

White collar whistleblowers cashing in on rewards

Dearbhail McDonald Legal Editor

IRISH whistleblowers are set to cash in on a €340m fund by giving information to the US authorities on white-collar crime.

Ireland is in the top 10 of a list of countries supplying information on alleged corporate wrongdoing to a new whistle- blowing office set up under the Dodd-Frank Act.

The 2010 Dodd-Frank act allows tipsters to receive a reward of up to 30pc of any sanctions collected for voluntarily submitting information that leads to a successful enforcement action by the powerful Securities and Exchange Commission (SEC).

The information must be original and result in a recovery of more than $1m (€749,000).

The vast majority of the 3,000 tips, complaints and referrals (TCRs) received by the Office of the Whistleblower in the first year of its operation have come from US states.

But Ireland, with its nine TCRs, has been ranked 8th in a list of non-US states after the UK (74), Canada (46), China (27) and Australia (21).

South Africa boasts 10 TCRs, Israel and Ireland both had nine, Germany lodged eight and Venezuela six.

Greg Glynn, a litigation partner at law firm Arthur Cox, has said that the number of Irish TCRs is expected to increase as you do not have to be an employee of a company that you make the TCR on.

Mr Glynn, who is the only Irish member of FraudNet, the global network of lawyers who specialise in asset tracing and recovery, said that companies in Ireland with US connections probably do not realise they have been the subject of a TCR.

"The added danger to this is that, as a result of the Irish whistleblowers' actions, even with possible SEC involvement, one can seriously envisage that the US Department of Justice will not be far behind.

"This could result in a criminal indictment of the company and/or several of the directors, wherever they are located," Mr Glynn added.

The rewards are high: one whistleblower, a former US banker, received €82m last September.

Almost one in five tips concerned corporate disclosures and financials.

Offering fraud accounted for 15.5pc of tips and manipulation was the cause of 15.2pc of TCRs.

Irish Independent

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