Government Penalizes Delays in Whistleblower Lawsuits

Anyone thinking about coming forward as a whistleblower needs to make sure that they speak to a qualified attorney as soon as possible. That’s because inaction can actually cost the potential whistleblower in a federal qui tam action.

The U.S. Securities and Exchange Commission (SEC) recently made a startling announcement in a case involving a whistleblower who provided valuable information about a company that violated SEC regulations. Although the whistleblower was rewarded for providing tips and information that ultimately led to a successful enforcement action against the violator, the SEC stated that the amount paid to the whistleblower could have been much higher had they come forward sooner.

According to the SEC, the whistleblower, who worked for the offending company, “hesitated” before providing relevant information and identifying the responsible individuals in the company. As a result of the delay, the corporation was able to continue its illegal practices even after the whistleblower became aware of the violations.

Even though the whistleblower’s delay was “limited,” the SEC still considered it to be “unreasonable.”

The SEC’s decision to lower the whistleblower’s reward has been viewed by some as misguided because it fails to account for the difficulties faced by anyone who is contemplating a qui tam action. The reality is that it is never easy to decide whether to come forward as a whistleblower and bring to light a company’s possibly unethical practices, especially if the potential whistleblower is unsure whether the business’ actions are actually illegal.

The same risks apply to potential qui tam whistleblowers. Anyone with knowledge about fraudulent activity being committed against the government may be able to file a whistleblower claim under the US False Claims Act.

Regardless of the pitfalls of waiting to file a whistleblower action, it is important to seek legal advice before taking an irreversible step. Anyone who is thinking about blowing the whistle on a company’s practices under the FCA should be sure to talk to a qualified qui tam lawyer immediately. A qualified attorney can look over the details of the case and determine the best course of action going forward.

If you have information that could lead to a whistleblower lawsuit, you should speak with a savvy and experienced qui tam attorney. The qui tam lawyers at Begelman & Orlow have decades of experience in whistleblower cases. Contact us today for a free consultation.

Request an Appointment

Over 115 Years combined experience protecting your rights New Jersey Employment Law Attorneys A Full Service Law Firm Handling Cases Across Pennsylvania and New Jersey

Serving Clients Nationwide

Cherry Hill Office

411 Route 70 East
Cherry Hill, NJ 08034

Telephone: 856.428.6020

Telephone: 856-547-7400

Fax: 856-428-5485