With the passage of increased whistleblower protections, financial services organizations could benefit from enhancing their whistleblower programs.
On Dec. 29, 2022, President Biden signed into law the Anti-Money Laundering Whistleblower Improvement Act (AML Whistleblower Improvement Act) as part of the Consolidated Appropriations Act of 2023. The AML Whistleblower Improvement Act strengthens provisions in the Anti-Money Laundering Act of 2020 (AML Act) for individuals alerting authorities to money laundering and sanctions violations, and it offers enhanced protections to them.
The new act not only offers protections but significant incentives. On May 5, 2023, the Securities and Exchange Commission awarded approximately $279 million – its largest award ever – to a whistleblower for coming forward with key information that led to enforcement of securities law violations and misconduct.
Given new protections and monetary incentives for whistleblowers, financial services organizations could benefit from taking steps to understand the enhanced whistleblower protections and new regulatory developments, strengthen their whistleblower programs, and prepare for how the Financial Crimes Enforcement Network (FinCEN) and other regulatory bodies might regulate and enforce the new provisions.