Money in America, prizes in Europe, sanctions in Italy: whistleblowing updates

Link to source: https://www.thegoodlobby.it/soldi-in-america-premi-in-europa-sanzioni-in-italia-cosa-si-muove-intorno-al-whistleblowing/

Priscilla Robledo, 9 november 2020

The discipline of whistleblowing, as well as its practical applications, is constantly evolving. Reporting offenses is increasingly important in our societies, both in the US and in Europe, and competent authorities recognize whistleblowers an ever greater asset. Let’s have a look at the most relevant updates that have occurred in recent weeks.

United States of America

On October 22, the US Securities and Exchange Commission (SEC) announced that it will pay a whistleblower (whose identity has not been disclosed) a reward of 114 million dollars: it is the highest reward ever (the second highest amounts to $ 50 million, paid out in June 2020).

According to SEC rules, not only we cannot know the identity of the whistleblower who allowed the investigation to begin, but we cannot know what case it was either. What we do know is that the SEC’s decision was based on the consideration that “The whistleblower in question has behaved in an extraordinary way” as stated by Jane Norberg, head of SEC whistleblowing office.After repeatedly reporting the wrongdoing internally, and despite the personal and professional difficulties, the whistleblower reported these wrongdoings to the SEC and other relevant agencies, and during the investigation provided constant assistance, which proved to be crucial. for the success of the entire investigation. “

Differently from the Italian law and the European directive, those whistleblowers who report potentially illegal facts to the US SEC (therefore not all cases of whistleblowing) in a voluntary, timely and credible manner and whose complaint leads to an effective punitive action are entitled to a reward. The SEC recently amended the rewards regulations, which now amount to between 10 and 30 percent of the total amount that the SEC is able to recover from the whistleblower’s complaint, when the sanction against offenders exceeds $ 1 million.

During 2020, the SEC issued rewards to 39 individuals totaling $ 175 million. Since the rewards program began in 2012, following the entry into force of the Dodd Frank Act, a total of 108 whistleblowers have received rewards totaling $ 676 million. The SEC has repeatedly stated that the money used for the rewards does not come from the stock market: the fund is financed entirely by the penalties paid by the perpetrators.

European Union

On this side of the Atlantic, however, the awards currently provided for whistleblowers are only symbolic or limited to legal protections against discrimination, which the directive that will come into force at the end of 2021 will extend to the entire territory of the Union.

On October 15th 2020, the ceremony for the “Right to Information” award was held, established by the GUE / NGL (Greens-Left) MEP group in memory of the Maltese investigative journalist Daphne Caruana Galizia. The award has been received by: former US Army intelligence officer Chelsea Manning, for exposing some of the US military’s behavior in Iraq, which violates human and civilian rights; the Correctiv journalism group, for uncovering the biggest bank and insurance fraud against the tax authorities of several European countries, the so-called cum-ex scheme; and employees of the Greek branch of the pharmaceutical company Novartis, who denounced a scheme of bribes by the company in Greece that lasted over a decade.

Italy

In Italy, at the end of the summer, the National Anti-Corruption Authority issued a new regulation on the sanctions that can be imposed both on those who are found guilty of retaliatory or discriminatory behavior, and on the organisation receiving the internal report, in the event that it does not follow this latter with adequate preliminary investigation, or when it does not provide a channel for receiving and managing reports.

The Good Lobby Italia will talk about this new regulation, as well as about some other practical aspects of whistleblowing management such as privacy issues, on November 16 in our Whistleblowing 2020 webinar together with Anac’s adviser Laura Valli. Other confirmed speakers are Gianluigi Marino, partner of the international law firm Osborne Clarke, and Yvette Agostini of the NGO Hermes Center for Transparency and Digital Human Rights with which The Good Lobby Italia carries out the EAT project. Participation in the webinar is free and full details and registration procedure are available here.

Nothing seems to move on the front of the transposition of the European directive 2019/1937 on the protection of whistleblowers. The transposition, which the Ministry of Justice is in charge of, should be completed by the end of 2021, but also due to the covid emergency, this dossier seems on hold.

This is worrying because, now more than ever, as large European public resources will arrive in Italy to deal with the covid emergency, it is important to facilitate whistleblowing activities by ensuring certain and effective protections. Italian companies can already adopt, on an experimental basis, reporting tools such as the one offered by the EAT project. In the meantime, we at The Good Lobby will continue our work of lobbying the Italian legislator so that the transposition of the directive is extensive, and leads to an effective law containing strong and extensive protections.