The Anti-Money Laundering Act of 2020 went into effect late that year. It updated the Bank Secrecy Act (BSA) in several meaningful ways, including the whistleblower provisions. It now offers more significant incentives to individuals who report BSA violations to the federal authorities, but it also provides a private cause of action against employers who retaliate. This action also applies to those employees who make internal disclosures and then are dismissed by the company for their actions. This provision goes further than the SEC, which only protects whistleblowers who report their disclosure to the SEC.
What this means
The BSA previously capped whistleblower rewards at $150,000. This amount was not considered much of an incentive for many long-term and high-level employees often needed for larger cases. The new payout is up to 30% of the monetary sanctions over $1 million levied due to the whistleblower’s disclosure to regulators or law enforcement. Conversely, there is no minimum amount for this incentive, which is cause for concern among anti-money laundering advocates and could lead to ambiguity.
The anti-retaliation for cause of action is defined as any change in the conditions or terms of the whistleblower during employment or after that resulted from the disclosure. The applicable rubric is:
- Low threshold of causation standard
- Eligibility for reinstatement
- Double backpay
- Damages compensation
- All legal fees
Legal protection often wise
Those considering making a money laundering disclosure within a company or to a regulatory agency may wish to check with legal counsel before moving forward. Not only can this strengthen the allegations, but it can also help increase the amount of compensation now available to the whistleblower.