WASHINGTON — U.S. Attorney General Eric Holder wants to offer Wall Street whistleblowers heftier payouts to report financial fraud.
In a speech slated for delivery Wednesday in New York, Holder will ask Congress to change a federal law to increase the financial reward paid to anyone who provides evidence of financial fraud to the government.
He’ll also announce plans to increase the number of FBI agents with forensic accounting experience who are focused on investigating white collar crime, according to a Justice Department official.
In his five-plus years leading the Justice Department, Holder has faced criticism about how the department has handled corporate crime investigations and its failure to bring charges against top bankers tied to the financial crisis. The department struggled to find proof of criminal wrongdoing, but in recent years has dusted off a civil law that it is using to extract multi-billion dollar settlements from some of the nation’s biggest banks for their shoddy mortgage securities sales practices.
It’s that law, known as the Financial Institutions Recovery and Reform Act, that Holder hopes to change to award bigger sums to whistleblowers in exchange for helping prosecutors bring white collar crime cases. The law currently caps whistleblower awards at $1.6 million, but Holder believes that’s not enough to make a Wall Street banker risk his lucrative career to come forward.
The attorney general wants to bring the law in line with another whistleblower law, the False Claims Act, which encourages whistleblowers to report fraud against government programs. In those cases, whistleblowers can win awards worth up to 30% of the prosecutor’s final settlement, sometimes totaling millions of dollars.
Holder hopes these steps will help the Justice Department pursue cases against bankers and executives, and not just against the corporations.