The Supreme Court strengthened whistleblower protections in a unanimous decision this month, rejecting an argument that financial whistleblowers need to prove their employers acted with “retaliatory intent” to recover damages when they are fired for engaging in protected activity under the law.

The 9-0 vote was a win for former UBS Securities bond strategist Trevor Murray, who had filed a whistleblower complaint under the Sarbanes-Oxley Act (SOX) saying he was fired from UBS for reporting violations of federal securities laws. Murray won a jury trial and a $2.6 million verdict against UBS in district court. UBS, however, won on appeal to the Second U.S. Circuit Court of Appeals, which ruled that Murray had to prove that UBS acted with retaliatory intent — not just that his report and his firing were connected. This intent interpretation differed from the rulings of four other federal appeals courts.

In her opinion for the Supreme Court that restored the jury verdict, Justice Sonia Sotomayor cited the original text of the SOX, which says no employer subject to the law “may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of” the employee’s protected whistleblowing activity. The text does not reference or include a “retaliatory intent” requirement, she wrote.

“It does not matter whether the employer was motivated by retaliatory animus or was motivated, for example, by the belief that the employee might be happier in a (different) position,” she wrote, adding “… The health, safety, or well-being of the public may well depend on whistleblowers feeling empowered to come forward. This Court cannot override that policy choice by giving employers more protection than the statute itself provides.”

Robert Herbst, a lawyer for Murray, said the decision was “a huge victory for whistleblowers all across the country.” 

Here’s why: Whistleblower advocates like Keller Grover’s whistleblower attorneys expressed their concern that had the Supreme Court not ruled in favor of Murray, would-be whistleblowers would be discouraged from taking the significant risk of coming forward to report financial frauds if they had to prove a defendant’s intent in order to receive protections.  

This was also the position articulated by the Anti-Fraud (TAF) Coalition in TAF’s amicus brief supporting Murray before the Supreme Court. Keller Grover attorneys are members of TAF and support its mission to support whistleblowers.

Murray was a research strategist for UBS Securities’ commercial mortgage-backed securities (CMBS) arm. Federal regulations dictate that researchers like Murray come up with independent opinions, but he repeatedly was pressured to publish notes slanted in favor of his company’s strategies. He reported the situation to his boss — twice — calling it unethical and illegal. Still, he received a positive annual performance review. Then he was fired, leading to his complaint.

“Brave whistleblowers take on substantial personal and financial risk to shine a light on unscrupulous companies engaged in illegal activity that could not only harm individual investors, but potentially cause broader harm to the financial markets,” Jacklyn DeMar, Director of Legal Education for TAF Coalition said last year. “They deserve the protection that the plain language of the statute requires and that Congress clearly intended.”

The lawyers at Keller Grover have three decades of experience representing whistleblowers and follow the latest developments in the law so they can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights and achieve the best possible outcome. If you have information about financial securities fraud, contact us for a confidential, free consultation.

Are there too many False Claims Act cases? Not only do the numbers say no, but the inference by FCA opponents that whistleblowers are filing frivolous suits is misguided.

First, let’s look at the numbers. Jacklyn DeMar of The Anti-Fraud Coalition argues we actually need more FCA cases to root out the likely amount of fraud that exists in a $6.27 trillion, yes trillion, federal budget.

• Of the 309,102 new civil cases filed in the United States in 2022, only 652 were qui tam actions — whistleblowers accounted for only 0.21% of the total civil cases filed. 
• Only $2.2 billion was recovered as a result of FCA cases in 2022 out of at least $300 billion in estimated fraud related to the Unemployment Insurance program, Paycheck Protection Program, and Medicare and Medicaid, among other government programs.
• Whistleblowers in successful FCA cases typically receive a portion of the recovery ranging between 15% and 30%. In fiscal year 2022, the government paid $488 million to whistleblowers.
• Putting the whistleblowers’ share in further perspective: $488 million is less than 0.01% of the annual federal budget.

We need more whistleblowers

At Keller Grover, we advocate for whistleblowers because they are making a sacrifice to speak up about wasteful spending and wrongdoing. Whistleblowers are often the only people able or willing to share information that can stop or expose a fraud, which is a view held not only by advocates like us but the federal government as well.

Keller Grover attorney Kate Scanlan, who’s also a member of TAF, appeared last year on a panel with Michael D. Granston, Deputy Assistant U.S. Attorney General for the Department of Justice’s Commercial Litigation Branch. They discussed the critical role whistleblowers play in False Claims Act enforcement.

“There’s all sorts of creative ways to engage in fraud, and ferreting out the next fraud scheme is always the challenge, right? We may find a particular fraud and course of conduct we address it. But then defendants move on to something new,” Mr. Granston said. “And that’s why we need to use all the tools at our disposal … to try to stay ahead rather than behind the fraud curve.”

Whistleblower awards are deserved

While large whistleblower settlements capture headlines, the monetary awards received by whistleblowers when recoveries are successful come at a personal cost.

“These cases go on for a long time…” Ms. Scanlan said on the panel. “A lot of (whistleblowers) get blackballed in their industries, and they’re not allowed to find places to work after they’ve filed these kinds of cases. …

“Smaller cases often involve key employees who are taking a big risk, to either disclose patient harm, or risks to our troops, or other material events that wouldn’t be known by the government except for this courageous individual who’s stepping forward to disclose what’s happening within their company.”

We stand up for these whistleblowers and guide them in determining the best path forward from the very beginning, helping minimize the impact of reporting, protecting their rights, and achieving the best possible outcome for the situation. 

Keller Grover provides confidential, free consultations to advise potential whistleblowers. If you need advice, contact us today.

At Keller Grover, we often see a surge of whistleblower reports after the new year. This can happen for a number of reasons. Sometimes people are fired or pushed out of a job toward the end of the year for speaking out about wrongdoing. Others may have discussed something they witnessed at work with friends and family over the holidays and feel compelled to step forward. And others just want to start the year fresh.

Whatever the reason, now is as good a time as any to report a fraud on the government. Here are some things to consider if you’re thinking about becoming a whistleblower.

The most effective law to fight fraud on the government is the False Claims Act. Any person with knowledge of fraud against the government, whether it’s related to Medicare billing, a military contract, or any other procurement program, can file a lawsuit under the False Claims Act to recover amounts taken improperly from the government. The government can intervene in the case, or allow the whistleblower to proceed without the government. Keller Grover has experience handling both situations.

Some common false claims include:

• overcharging for a product or service
• delivering a defective or ineffective product
• paying the government less than it is entitled to under a contract
• charging the government for less than the promised amount of the product
• underpaying money owed to the government
• charging for one thing but delivering something different.

The False Claims Act incentivizes whistleblowers by rewarding them with a percentage of the amount the government successfully recovers as a result of the whistleblower’s False Claims Act case, up to 30 percent.

“With its incentives and protections, the False Claims Act has been extraordinarily effective in spurring whistleblowers to sound the alarm on fraud,” says Kate Scanlan, a whistleblower attorney at Keller Grover. “The procedures can be complicated for the layman, but with knowledgeable legal counsel, whistleblowers can navigate the judicial waters with confidence — and with results. They can help expose these frauds and steer government funds back to the purposes and programs for which they were intended.”

Besides the False Claims Act, there are other whistleblower laws, including the Sarbanes-Oxley Act and the Dodd-Frank Act (broadly seeking to keep financial institutions/publicly traded companies stable, forthcoming and prudent), and IRS whistleblower law (addressing tax noncompliance). Other laws establishing whistleblower programs include the National Traffic and Motor Vehicle Safety Act (provides incentives for automobile industry whistleblowers who report safety hazards) and the Anti-Money Laundering Whistleblower Improvement Act (seeks information about activities that violate the Bank Secrecy Act). California has additional whistleblower laws as well. 

If you’re still at your job and have seen potential wrongdoing, here are some steps you can take in addition to contacting us for a consultation. In addition, you can read our answers to frequently asked questions about becoming a whistleblower.

Whistleblowers deserve the best advocates. Keller Grover provides confidential, free consultations to advise those who have observed suspected wrongdoing. We can guide them in determining the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights, and achieve the best possible outcome for the situation. If you need advice, contact us today.