On Wednesday, September 17th, U.S. Attorney General Eric Holder signaled that the Department of Justice (DOJ) will continue its aggressive prosecution of claims arising out of the financial crisis and called for enhanced financial fraud whistleblower awards. Attorney General Holder also stressed the importance of prosecuting financial fraud, civilly and criminally, against both corporate actors and individuals. In this respect, his statements echoed remarks by Benjamin M. Lawsky, New York State's Superintendent of Financial Services, who in a speech earlier this year announced his intention to hold more individuals, and not just corporations, accountable for alleged financial wrongdoing.

Attorney General Holder indicated that more criminal charges for financial fraud were in the pipeline and argued for enhancing the whistleblower awards available under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) on the grounds that the whistleblower awards available under the statute are too low to serve as meaningful incentives for would-be whistleblowers in the financial services industry.

FIRREA was enacted in response to the savings and loans crisis of the 1980s. Its primary purpose was to reform the financial regulatory regime for the thrift industry, but Section 951 of FIRREA (12 U.S.C. §1833a) also granted the DOJ new authority to bring civil claims for fraudulent activities. Section 1833a was largely forgotten until the DOJ began using it to investigate and prosecute banks for claims relating to the financial crisis. Since then, FIRREA has been used in some of the largest financial industry cases in recent years, including the $4 billion civil penalty against Citigroup and the $16.65 billion Bank of America settlement in July 2014.

FIRREA contains a whistleblower provision providing for awards of up to $1.6 million dollars if prosecutors pursue a case based on a whistleblower tip. However, the $1.6 million cap under FIRREA is significantly lower than the awards available to whistleblowers under the False Claims Act and the Dodd-Frank Act, both of which provide for awards that are equal to as much as 30% of the assessed penalty.

In his speech, Attorney General Holder also responded to recent criticism of the lack of criminal cases against Wall Street executives and asserted that increasing the financial incentives under FIRREA would encourage individuals to "come forward and cooperate with ongoing investigations." This would enable the government to take more rapid and effective action against financial crimes perpetrated by individuals and corporations. According to Attorney General Holder, increasing the whistleblower awards available under FIRREA, "perhaps to False Claim Act levels," would improve the DOJ's ability to conduct investigations and stop misconduct before wrongdoing "becomes so widespread that it foments the next crisis."