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Broad New Whistleblower Law Applies to Banks, Many Cash Businesses

On Behalf of | Jun 16, 2021 | Whistleblower Claims |

The federal Anti-Money Laundering Act of 2020 (AMLA) took effect this year. It provides substantial protections for whistleblowers who help identify activities that could involve money laundering or the financing of terrorism. It is an effort to modernize the Bank Secrecy Act for the first time since 2001.

The AMLA is broader than the Dodd-Frank Act in both scope and protection. It applies to all financial institutions, which are defined expansively. Banks are clearly covered and, according to some experts, the law applies to many non-bank businesses where lots of cash is used. This could include pawn brokers, jewelers, casinos, car washes, travel agencies and even restaurants.

More comprehensive protections for whistleblowers

The new law’s whistleblower protections are loosely modeled on the Dodd-Frank Act’s provisions, but the AMLA’s protections are more extensive. Both laws encourage whistleblowers to report legal violations by offering a financial reward for doing so. However, the AMLA closed some loopholes in the Dodd-Frank regime.

For one thing, the AMLA protects people who complain internally. Courts have ruled that the Dodd-Frank Act only protects people who complain directly to the Securities and Exchange Commission or the Commodity Futures Trading Commission.

For another, the AMLA protects people involved in business compliance whose job duties involve identifying such violations. Under the Dodd-Frank Act, insiders like these could not receive awards and were not protected from retaliation.

Expanded access to whistleblower awards

The AMLA may also increase the chance a whistleblower will receive a monetary award for their actions and provides greater protections against employer retaliation.

For example, if an employee prevails in an AMLA retaliation complaint after blowing the whistle, the remedy is substantial. The employee would be entitled to receive:

  • Job reinstatement
  • Double back-pay with interest
  • Compensatory damages, including attorney fees and costs
  • Any other appropriate remedy

Moreover, an employee’s rights and remedies under the AMLA cannot be waived by contract or personnel policy, and retaliation claims are not subject to arbitration.

Finally, the whistleblower must receive a monetary award in any successful enforcement action in which the financial sanctions exceed $1 million. That award could be as high as 30% of the total sanctions.

Considering blowing the whistle? Get support

If you work in the financial services industry or any cash-heavy business, you may encounter evidence of money laundering or other wrongdoing. Before you take any concrete steps, talk to an experienced employment law attorney who can advise you on how to protect your interests.