Michael Douglas’s advice in FBI ad could deny Wall Street tipsters cash reward
To report insider trading, Douglas says, contact the FBI.
But tipsters who follow Douglas’s advice could miss out on cash rewards that the government is willing to pay, whistleblower lawyer David K. Colapinto said.
“If they just go to the FBI, they are probably going to get zero,” Colapinto said. “The FBI’s not obligated to do anything for them.”
Colapinto said that if informants want a reward for information that exposes financial fraud, they should consult a lawyer — and file a whistleblower claim with the Securities and Exchange Commission.
Under the SEC’s whistleblower program, tipsters are entitled to 10 to 30 percent of the money the SEC collects if the whistleblower’s information leads to an enforcement action in which sanctions of more than $1 million are ordered.
The bounties were ordered by Congress in the aftermath of the financial crisis and were intended to be powerful weapons in the war on Wall Street fraud.
The stakes are high. In some enforcement cases, the SEC collects hundreds of millions of dollars. The IRS has a similar program.
“I’m not aware of any program of that sort within the FBI,” FBI spokesman William Carter said.
It is possible that people who cooperate with the FBI could receive payments, but those would be determined on a case-by-case basis, Carter said. The spokesman said he was unable to explain more specifically how any such payments might apply to people submitting tips.
“From what I can see, the FBI pays awards for the people it puts on wanted posters, and not much more,” said Patrick Burns of Taxpayers Against Fraud, a group that works with whistleblowers and their attorneys.
A Justice Department spokeswoman did not respond to questions about any potential rewards.
“People have to come forward with the understanding that they might not get anything,” said Douglas Leff, assistant special agent in charge of the FBI’s New York office.
“If I were financially motivated, I’d probably call both” the FBI and the SEC, Leff said.
The new FBI public service announcement does not mention the possibility of a reward.
However, it includes a clip from the movie “Wall Street” featuring Gekko’s signature line: “The point is, ladies and gentlemen, greed, for lack of a better word, is good.”
David Chaves, a supervisory special agent at the FBI, said he hopes tipsters are driven by other considerations.
“I’d like to see people be patriotic and just do the right thing instead of being motivated by money,” he said.