The Federal Reserve Board ("FRB") encouraged whistleblowers to report any misconduct by FRB-supervised banking organizations.
In a policy statement on whistleblower claims sent to the officer in charge of supervision at each Federal Reserve Bank, the FRB urged Federal Reserve staff to report "violations of law or regulation, or violations of any orders or written agreements issued by the Federal Reserve." The FRB said that claims can be submitted to supervisory staff and that the independent FRB Ombuds Office, ensures that "intake of whistleblower claims is conducted confidentially." The FRB said that employees of depository institutions may choose to remain anonymous, but cautioned that in the event that other regulators, law enforcement agencies or courts request to reveal the identity of the whistleblower, the FRB may not be able to protect the employee's identity.
The FRB assured whistleblowers that the Federal Deposit Insurance Act protects employees from retaliation and that potentially retaliatory acts should be brought to the FRB's attention immediately.
Additionally, the FRB said that if a whistleblower fulfills their obligations, the maximum reward payable would be the lesser of 25 percent of the total fine recovered or $100,000. The FRB cautioned that whistleblower awards are not guaranteed and are only paid out after the conclusion of a successful enforcement proceeding. The FRB urged employees to report suspected misconduct as soon as possible to the Federal Reserve Consumer Help Center or Office of the Inspector General.
The FRB's invitation for new whistleblower filings comes on the heels of similar statements issued by the SEC and the DOJ. In light of clear signals that increased enforcement activity is on the horizon, financial institutions in particular may wish to use the FRB's statement as an opportunity to revisit and, if necessary, update their internal compliance and risk mitigation polices.