Cash-for-Information Whistleblower Programs: Effects on Whistleblowing and Consequences for Whistleblowers

64 Pages Posted: 4 May 2021

See all articles by Aiyesha Dey

Aiyesha Dey

Harvard Business School

Jonas Heese

Harvard University - Business School (HBS)

Gerardo Perez Cavazos

University of California San Diego

Date Written: April 30, 2021

Abstract

We study the effect of financial incentives on whistleblowing and the consequences for whistleblowers under the cash-for-information program of the False Claims Act (FCA). Exploiting appeals-court decisions that increase financial incentives for whistleblowing, we find that greater incentives increase the number of lawsuits filed with the regulator, the regulator’s investigation length, the percentage of intervened lawsuits, and the percentage of settled lawsuits. Using information from lawsuits, a professional networking site, and background checks for up to 1,168 whistleblowers, we find that whistleblowers’ long-term annual income decreases by approximately 8.6% or $6,500 but do not find evidence of social costs. In comparison, whistleblowers can expect to receive approximately $140,000 for blowing the whistle. Overall, our results suggest that the FCA cash-for-information program helps expose corporate misconduct and helps compensate whistleblowers for their income loss.

Keywords: Whistleblowers, cash-for-information whistleblower programs, False Claims Act, corporate misconduct, consequences for whistleblowers

JEL Classification: D82, G18, M41

Suggested Citation

Dey, Aiyesha and Heese, Jonas and Perez Cavazos, Gerardo, Cash-for-Information Whistleblower Programs: Effects on Whistleblowing and Consequences for Whistleblowers (April 30, 2021). Available at SSRN: https://ssrn.com/abstract=3837308 or http://dx.doi.org/10.2139/ssrn.3837308

Aiyesha Dey

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Jonas Heese (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan Hall 397
Boston, MA 02163
United States

Gerardo Perez Cavazos

University of California San Diego ( email )

9500 Gilman Drive
La Jolla, CA 92093
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
215
Abstract Views
746
rank
175,061
PlumX Metrics