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The impact of international whistleblowing on global corporate compliance

Marc S. Raspanti (msr@pietragallo.com) is a name partner of Pietragallo Gordon Alfano Bosick & Raspanti LLP in Philadelphia, Pennsylvania, USA. Meredith S. Auten (meredith.auten@morganlewis.com) is a partner in Morgan Lewis’s White Collar Litigation Practice in Philadelphia, Pennsylvania, USA.

This is the first part of a two-part article.

Over the last 33 years, whistleblowers have enjoyed historic success advancing claims under the United States’ False Claims Act (FCA). The United States government has recovered more than $62 billion as a result of both the FCA and the efforts of mostly domestic whistleblowers. Although the great majority of whistleblowers have been US citizens, that trend is changing. The rise of international whistleblower laws and the global notoriety of the FCA have sparked global interest. Specifically, an increase in non-US citizens filing and obtaining recoveries under the FCA is a new but growing phenomenon. Interestingly, these whistleblowers are not taking advantage of their own countries’ whistleblower laws, most likely because international whistleblower laws, unlike the FCA, generally do not provide a monetary financial incentive to whistleblowers. Nor do most offer the robust whistleblower protections provided by the FCA. Lastly, experienced attorneys are disincentivized to pursue these claims, as none of these laws provide for the payment of counsel fees or costs on successful claims. These laws purportedly help to minimize government corruption and fraud, but they will fail without financial incentives and strong protections to whistleblowers.

In this first part of a two-part article, we discuss the success of the FCA, the rise of international whistleblowers through a study of the Michael Epp case, and what global companies need to do to prepare. In the concluding part, we review exemplar international whistleblowing laws that have been recently enacted and what we predict will be their impact.

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