In the United States, government regulatory entities have the
power to give monetary awards to employees who report illegal
activities at their companies.
One of the U.S. government entities with a financial reward
program for whistleblowers is the Securities and Exchange
Commission (SEC). This entity rewards employees of companies in any
part of the world who provide useful information to identify,
investigate and prosecute those responsible for committing illegal
acts, including breaches of the Foreign Corrupt Practices Act
The SEC understands that persons who work for companies are in a
privileged position to identify illegal acts being committed since
they have access to information which is key to investigations. SEC
protects the identity of the whistleblowers and does not provide
information that can be used to identify them, but does announce
the awards given. In 2015, SEC received 4,000 tips.
The amounts of the awards are notably high. These awards can
range from 10% to 30% of the amount recovered by SEC when this
amount exceeds US$1 million (fines and sanctions). Since the
program began in 2011, SEC has paid more than US$85 million in
awards to 32 whistleblowers who provided evidence of illegal
corporate acts. In 2014, the largest award was more than US$30
million, while in 2013 it was approximately US$14 million. Recently
on June 6, 2016, SEC awarded a whistleblower US$17 million.
In a 2016 case, a former compliance officer of a company engaged
in the manufacture and distribution of medical equipment brought a
qui tam action alleging that the company had given money,
medical equipment and trips to doctors in the United States to
increase sales paid with public funds. The investigation based on
the whistleblower´s information revealed that the company had
also made payments and gifts to doctors at public hospitals in
Brazil, Bolivia, Chile, Colombia, Argentina, Mexico and Costa Rica
to obtain business opportunities, in breach of the FCPA. The
whistleblower's information enabled the Department of Justice
(DOJ) to prosecute the company. The company reached an agreement
with the DOJ and agreed to pay US$646 million. The whistleblower
received a monetary award of US$51 million for the information and
These cases show that companies must have robust internal
policies to prevent and sanction illegal activities committed. When
companies fail to take these measures, there is a risk that their
employees may file complaints to the authorities. This risk is
increased in cases where the authorities, like those of the United
States, offer monetary rewards to the whistleblowers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Board of Directors of the Social Security Institute of the Republic of Guatemala approved the Agreement Number 1390, which was published in the Official Newspaper on January 2nd, 2017; and came into force since January 10, 2017.
There is still debate about which law must be enforced to the expatriate employee, that is, the one that was transferred from multinational company to work in our country and vice versa.
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