Misleading Claims About Climate and ESG Risks
The Securities and Exchange Commission recently announced the creation of a Climate and ESG Task Force in the Division of Enforcement that will evaluate tips, referrals, and whistleblower complaints on ESG-related issues. Whistleblowers can report companies for misleading investors about their exposure to climate-related risks, about their transition or “net-zero” plans, or about their sustainability research and claims.
Inflated Oil and Gas Reserve Estimates
The Securities and Exchange Commission requires publicly listed fossil fuel companies to disclose estimates of reserves as supplemental information in their financial statements, but the process of reserve estimation is highly vulnerable to manipulation. Whistleblowers can use the SEC Whistleblower Program to confidentially report companies who engage in reserve manipulation schemes.
Royalty Underpayment Schemes
The False Claims Act prohibits fraud in connection with applications for permission to drill and related lease applications. Oil and gas whistleblowers have successfully used the qui tam provision of the False Claims Act to help the federal and state governments recover billions from oil companies for underpaying royalties, earning tens of millions in rewards for their efforts.
Hidden Pollution and Environmental Damage
To report concealed spills or false claims about natural gas flaring, whistleblowers can use the False Claims Act. With the Dodd-Frank Act, whistleblowers can report false claims about asset retirement obligations or attempts to fraudulently spin-off liabilities into smaller, underfunded companies. Whistleblowers with knowledge of oil spills from mobile drilling rigs may also be able to report through another strong whistleblower law, the Act to Prevent Pollution from Ships.
Fraudulent Manipulation of Oil and Gas Futures
Whistleblowers around the world can use the CFTC Whistleblower Program to confidentially report manipulative and deceptive schemes in connection with commodities, futures or swaps, including attempts to manipulate oil and gas prices.
Foreign Bribery and Money Laundering
Whistleblowers around the world can use the Foreign Corrupt Practices Act (FCPA) to report corruption and the use of falsified documents to conceal bribes or accounting schemes designed to hide improper payments. Whistleblowers around the world with evidence of money laundering can use the U.S. IRS whistleblower program or the Anti-Money Laundering Act to report money laundering and illicit financial flows, while protecting their identities and qualifying for a financial reward.