Whistleblowers are critical for exposing fraud and misconduct. However, potential whistleblowers are often concerned about protecting their identities.
As a whistleblower law firm, we are often asked whether a whistleblower can remain anonymous. The short answer is that whistleblowers can, in many cases, protect their identities, but the degree of protection varies based on the type of whistleblower claim and the circumstances.
Anonymity under the Various Federal Whistleblower Programs
The SEC Whistleblower Program
SEC whistleblower claims involve violations of federal securities laws. The SEC Whistleblower Program allows anonymous submissions and provides strong confidentiality protections. Whistleblowers who file a tip with the SEC can remain anonymous during the filing and investigation process. To file anonymously, the whistleblower must be represented by an attorney who submits the Form TCR (Tip, Complaint, or Referral) on their behalf.
By law, the SEC is required not to disclose any information that could reasonably be expected to reveal a whistleblower’s identity.
However, to receive a whistleblower award, the whistleblower must eventually disclose their identity, but only to the SEC. Specifically, when applying for an award on Form WB-APP, the whistleblower must identify themselves so the SEC can determine their eligibility. This disclosure happens only at the end of the whistleblowing process after the investigation is completed and there is a monetary recovery.
Nevertheless, the SEC will not publicly disclose a whistleblower’s identity even when announcing an award. The Dodd-Frank Act requires the SEC to keep whistleblowers’ identities confidential.
About 20% of individuals who provide tips to the SEC do so anonymously. The ability to report anonymously is considered a primary feature of the SEC Whistleblower Program, encouraging corporate insiders and others to come forward by reducing their fear of potential exposure.
The CFTC Whistleblower Program
CFTC tips involve violations of the Commodity Exchange Act. The CFTC Whistleblower Program is similar to the SEC Whistleblower Program in terms of the ability of whistleblowers to be anonymous.
Tips can be filed anonymously if the whistleblower is represented by an attorney, to whom the whistleblower must provide identity verification. However, unlike the SEC program, the CFTC permits whistleblowers to file award applications (Form APP) anonymously through their attorney. However, the CFTC may require the attorney to confirm the whistleblower’s identity at the time of award payment.
Like the SEC, the CFTC takes whistleblower confidentiality seriously. By law, the CFTC is prohibited from disclosing information that could reasonably reveal a whistleblower’s identity.
The IRS Whistleblower Program
Whistleblowers must disclose their identities to the IRS when filing claims to the IRS Whistleblower Program. However, by law, the IRS is required to keep whistleblowers’ identities confidential. Thus, the public and the targets of the whistleblower’s claim will generally not be able to find out who you are.
In certain circumstances, such as when the whistleblower is an essential witness in a court proceeding, the IRS may need to reveal the whistleblower’s identity. However, the IRS will inform the whistleblower before proceeding in these cases.
Additionally, if an IRS whistleblower appeals a reward decision to the U.S. Tax Court, they can request to proceed anonymously, and those requests are routinely granted.
False Claims Act Whistleblowers
False Claims Act (“FCA”) whistleblowers have more limited anonymity protections compared to SEC and CFTC whistleblowers.
FCA cases are initially filed under seal (meaning that the case will not appear on the public court docket) for at least 60 days (a period that is often extended for months or years). Only the government and the court will know the whistleblower’s identity during this period. The targets of the whistleblower claim and the public will not have this information or even know that a case has been filed.
However, once the government decides whether to intervene in the case and the seal is lifted, the whistleblower’s identity is typically disclosed. While the FCA itself does not contain specific provisions for filing anonymously beyond the initial seal period, courts often allow whistleblowers to proceed under pseudonyms if they reasonably fear retaliation or economic hardship.
Additionally, many whistleblowers succeed in maintaining their anonymity by creating special-purpose corporate entities (typically LLCs) to which they legally assign their claims. The corporate entity is then named the whistleblower in the complaint and other court documents. With this approach, the whistleblower’s name should not come up in docket searches in, for example, a background check.
While this method provides a degree of anonymity, it is not a guarantee. The government will generally want to know the whistleblower’s identity and interview the whistleblower during the investigation. If the case proceeds to litigation after unsealing, rather than ending in a settlement, the defendant will attempt to learn the whistleblower’s identity through the discovery process and may succeed in doing so.
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Published By
Attorney Mark A. Strauss
Mark is a battle-hardened and tenacious anti-fraud attorney with more than twenty years of experience in complex civil litigation. He has represented qui tam whistleblowers under the False Claims Act as well as victims of fraud under the federal securities laws and the Racketeer Influenced and Corrupt Organizations Act (RICO). His efforts have resulted in the recovery of hundreds of millions of dollars for clients.
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