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FinCEN has published a Notice of Proposed Rulemaking (“NPRM”) that would formalize and expand its whistleblower program, offering potentially substantial financial payouts to whistleblowers reporting certain financial crimes. According to FinCEN’s announcement, this initiative is designed to incentivize and protect individuals who report violations of major financial crime laws—specifically, the Bank Secrecy Act (“BSA”), the International Emergency Economic Powers Act (“IEEPA”), the Trading With the Enemy Act (“TWEA”), and the Foreign Narcotics Kingpin Designation Act (the “Kingpin Act”). Treasury Secretary Scott Bessent has said that through this rule, “Treasury will reward whistleblowers who provide timely, actionable information on fraud, sanctions violations, and other significant illicit finance activity[.]”Under the proposed rule, whistleblowers could be entitled to 10-30 percent of monetary penalties the government collects as a result of whistleblower tips.
The NPRM, which notably requires a 120-day waiting period for whistleblowers involved in certain fiduciary and compliance functions, highlights the importance of investing in robust compliance programs. It signals heightened enforcement interest in financial crimes, and advertises weighty incentives to motivate potential whistleblowers.
Overview and Legal Authority
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