Damages and Penalties in Whistleblower Cases

It is important for anyone involved to understand damages and penalties in whistleblower cases. With respect to the False Claims Act, damages are generally damages to the government or the government’s loss. It’s a little unusual. In most kinds of lawsuits, civil lawsuits, the damages are monetary losses or something that you can claim to be the equivalent of a monetary loss suffered by the person suing. Of course, there can also be damages suffered by whistleblowers personally if they are the subject of retaliation. But when we’re talking about whistleblower damages under the False Claims Act, for the underlying case of fraud, we are really talking about damages to the federal or to the state government.

Violations of securities law can also result in penalties. In those cases, damages to investors can be the subject of an action undertaken by the SEC on the basis of information from a whistleblower act. When that happens a whistleblower may obtain a share of the government’s action as a reward.

Damages in whistleblower law are interesting because they don’t relate, at least in the underlying action, to a damage suffered by the person bringing the case or reporting the violation. This relationship makes whistleblower cases very unusual under civil law.

Can Companies or Individuals Be Sent to Jail in Whistleblower Cases?

Individuals are not sent to jail directly under the authority of the False Claims Act, because the False Claims Act is a civil law. However, the Department of Justice has made it clear that they will review False Claims Act cases to see if there are criminal violations involved, and they reserve the right to charge fraudsters with criminal violations and the resulting penalties.

Private attorneys have no say whatsoever in what the government does with the information with respect to a criminal prosecution. There’s been a lot of news lately that the Attorney General’s Office may now be prosecuting (or may be considering prosecuting) financial issues with more frequency with respect to criminal actions, and that could potentially change the landscape of False Claims litigation.

There was a lot of discussion about this topic when the financial crisis hit back in 2007. However, there really wasn’t much in the way of criminal prosecutions, for the financial crisis that occurred back then.

Of course, despite high-profile politicians telling us that companies are people, there’s yet to be an incident in which a company has gone to jail. Companies have, however, been debarred from doing business with the government as a result of findings in a whistleblower case. In addition, companies can be suspended from trading under SEC laws. Individuals, have also been prosecuted as a result of information the government obtained from whistleblowers of course.

Discuss Potential Damages and Penalties in Whistleblower Cases

Damages and penalties in whistleblower cases are two elements that are crucial to understanding. To learn more, reach out to a qualified DC attorney for assistance with a case.