Hoosier Banker 57 decades, there have been a multitude of FCA cases – some of which resulted in settlements up to hundreds of millions of dollars, with whistleblowers receiving a significant share for having reported the fraud. Last year, the Anti-Money Laundering Act of 2020 was amended to create a whistleblower reward program. The program is intended to encourage insiders to report violations of the Bank Secrecy Act. If an insider provides “original information” obtained from the whistleblower’s independent knowledge or analysis (not in connection with normal course of the whistleblower’s job duties) and not already known to the Department of the Treasury or the Department of Justice from other sources, the whistleblower is eligible to recover up to 30% of the sanctions entered against the financial institution. Each of the laws have anti-retaliation provisions, prohibiting retaliation against any employee who blew the whistle (engaged in protected activity). Retaliation does not only mean termination or demotion. It can be any negative action, such as being denied a raise or transfer, missing out on training or other job opportunities, unjustified low or poor performance evaluations, or altering work hours/schedule or location. Sometimes the retaliation may not be as obvious, such as increased scrutiny or monitoring, shunning or exclusion from meetings. What should financial institutions do to guard against whistleblower risk? % Promote safe and sound banking practices and identify, manage and mitigate operational risks. The Federal Reserve previously issued an interagency paper on Sound Practice to Strengthen Operational Resilience, which provides sound guidance for larger financial institutions. % Strengthen compliance. Review and assess existing policies and training provided to directors, officers, managers and employees. % Establish and maintain a culture of openness with support from the board, executives, officers and senior management. % Encourage internal reporting of problems and provide effective reporting channels, including an anonymous tip hotline. % Have a robust whistleblower policy that includes a strict no-retaliation provision and applies to directors, officers and employees. % Train directors, officers and managers on the policies so they do not retaliate and know how to properly respond to INDIANA | ILLINOIS | MISSOURI | OHIO | WISCONSIN A FULL SERVICE LAW FIRM WITH A SIMPLE PROMISE, PUT YOU FIRST. Formerly SmithAmundsen LLC & Davis | Kuelthau S.C. LʨěûʇúāěÊʇ¨¿āīĦʇāīěʇÊńʨûÆÊÆʇ¿¨ûóåûÝɊʇœû¨ûÀÊɊʇ¨ûÆʇÀāěĘāě¨ĦÊʇ Ħě¨ûğ¨ÀĦåāûʇõÊݨõʇğÊěľåÀÊğʇ¨Ħʇamundsendavislaw.com Congratulations to our friends at the Indiana Banking Association on celebrating 125 years of service to the Indiana banking community! whistleblower complaints, then hold them accountable for how they handle claims. % Have clear procedures for handling complaints and promptly investigate reports of compliance issues. % Meet with whistleblowers and keep them informed during the investigation process, being mindful of confidentiality and privilege issues. Whistleblowers need to know that (Continued on page 58.)
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