Whistleblower And Sarbanes-Oxley Act Research Paper
Whistleblowing and Sarbanes-Oxley
Daniel A. Sievers
Professor: Joe McGirt
Strayer University LEG 500
10/20/2014
Abstract
The purpose of this paper is to discuss the essential characteristics of whistleblowers and how organizations take action against them. Whistleblower is a person who exposes unethical behavior or criminal activity occurring in an organization. Companies deal with whistleblowing in many different ways, and it effects the company and the employee in significant ways. Companies must follow the rules under the Sarbanes-Oxley Act and not punish employees that properly direct complaints through the proper channels.
Key Characteristics of a Whistleblowier
Whistleblowers are employees that decide to inform unethical or unlawful …show more content…
activities of their employers. Whistleblowers can come from any private companies, nonprofit organizations, or for the government (Mesmer-Magnus & Viswesvaran 2005). They may reveal information inside or outside their company to supervisors, regulators, or to the media. Whistleblowers have shared characteristics, and they tend to have excellent job performance, educated, hold supervisory positions and bring a disturbing situation to light, the urge to bring about some corrective change (Boone & Kurtz, 2013). A recent whistleblower of a public trading company is Keith Edwards who exposed J.P. Morgan for submitting thousands of mortgages for insurance through the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) that did not qualify for government guarantees. Mr. Edwards had an issue with defrauding the government into insuring bad loans and was let go in 2008 from J.P. Morgan (Stempel, J, 2014). J.P. Morgan had to settle for $614 million from his whistleblowing actions and Mr. Edwards will be paid almost $64 million for providing tips that led to their settlement from Violations of the False Claims Act (Stempel, J, 2014).
Whistleblower Justified in Reporting Company’s Actions
Keith Edwards was let go from J.P. Morgan in 2008 for poor performance from his job as a low level executive. Mr. Edwards worked for JP Morgan for over eight years (Stempel, 2014). I believe his actions were to get revenge on his former company and to get paid for helping the government against his former employer. He was justified for reporting crimes to the government about fraud because the company was taking advantage of the government for millions. If he wasn’t let go by the company, I don’t think he would have sued them. He knew what was going on during his time at JP Morgan and didn’t report anything till he was fired.
Sarbanes-Oxley Act
The extent that a whistleblower would be under protection Under the Sarbanes-Oxley Act of 2002 is very vast, and this law extends current federal whistleblower protection laws for employees.
Public companies will be well advised to pay particular attention to these new protections for corporate whistleblowers. Sarbanes-Oxley installs procedures for ensuring that whistleblowers’ complaints are appropriately directed and also creates a civil cause of action for whistleblowers who get punished (Bredeson & Prentice, 2010). The Sarbanes-Oxley Act covers Section 806 that protects an employee who provides this information to a federal regulatory, law enforcement agency, or to a person with supervisory authority over the employee (Bredeson & Prentice, 2010). Section 806 protects an employee that provides information of fraud without retaliation or discrimination from employers. Whistleblowers can recover lost wages and benefits, reinstatement and special damages (Bredeson & Prentice, 2010). Employees have many rights under these whistleblower laws and should report violations without worrying about employer abusing their powers against them. The whistleblower 's complainants also have the option to be removed once the complaint has been pending at the Department of Labor for 180 days. Employees have many protections under the Sarbanes-Oxley Act and should report unethical and illegal behavior to help the United States get rid of these corrupt business
practices.
References
Boone, L.E., & Kurtz, D.L. (2013). Contemporary Business. John Wiley & Sons
Bredeson, D. & Prentice. R. (2010). Student Guide to Sarbanes-Oxley Act. South-Western
Mesmer-Magnus, J. R., & Viswesvaran, C. (2005). Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation. Journal Of Business Ethics, 62(3), 277.
Stempel, J (2014, March). JPMorgan whistleblower gets $63.9 million in mortgage fraud deal. Retrieved from http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower- idUSBREA261HM20140307
Daniel A. Sievers
Professor: Joe McGirt
Strayer University LEG 500
10/20/2014
Abstract
The purpose of this paper is to discuss the essential characteristics of whistleblowers and how organizations take action against them. Whistleblower is a person who exposes unethical behavior or criminal activity occurring in an organization. Companies deal with whistleblowing in many different ways, and it effects the company and the employee in significant ways. Companies must follow the rules under the Sarbanes-Oxley Act and not punish employees that properly direct complaints through the proper channels.
Key Characteristics of a Whistleblowier
Whistleblowers are employees that decide to inform unethical or unlawful …show more content…
activities of their employers. Whistleblowers can come from any private companies, nonprofit organizations, or for the government (Mesmer-Magnus & Viswesvaran 2005). They may reveal information inside or outside their company to supervisors, regulators, or to the media. Whistleblowers have shared characteristics, and they tend to have excellent job performance, educated, hold supervisory positions and bring a disturbing situation to light, the urge to bring about some corrective change (Boone & Kurtz, 2013). A recent whistleblower of a public trading company is Keith Edwards who exposed J.P. Morgan for submitting thousands of mortgages for insurance through the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) that did not qualify for government guarantees. Mr. Edwards had an issue with defrauding the government into insuring bad loans and was let go in 2008 from J.P. Morgan (Stempel, J, 2014). J.P. Morgan had to settle for $614 million from his whistleblowing actions and Mr. Edwards will be paid almost $64 million for providing tips that led to their settlement from Violations of the False Claims Act (Stempel, J, 2014).
Whistleblower Justified in Reporting Company’s Actions
Keith Edwards was let go from J.P. Morgan in 2008 for poor performance from his job as a low level executive. Mr. Edwards worked for JP Morgan for over eight years (Stempel, 2014). I believe his actions were to get revenge on his former company and to get paid for helping the government against his former employer. He was justified for reporting crimes to the government about fraud because the company was taking advantage of the government for millions. If he wasn’t let go by the company, I don’t think he would have sued them. He knew what was going on during his time at JP Morgan and didn’t report anything till he was fired.
Sarbanes-Oxley Act
The extent that a whistleblower would be under protection Under the Sarbanes-Oxley Act of 2002 is very vast, and this law extends current federal whistleblower protection laws for employees.
Public companies will be well advised to pay particular attention to these new protections for corporate whistleblowers. Sarbanes-Oxley installs procedures for ensuring that whistleblowers’ complaints are appropriately directed and also creates a civil cause of action for whistleblowers who get punished (Bredeson & Prentice, 2010). The Sarbanes-Oxley Act covers Section 806 that protects an employee who provides this information to a federal regulatory, law enforcement agency, or to a person with supervisory authority over the employee (Bredeson & Prentice, 2010). Section 806 protects an employee that provides information of fraud without retaliation or discrimination from employers. Whistleblowers can recover lost wages and benefits, reinstatement and special damages (Bredeson & Prentice, 2010). Employees have many rights under these whistleblower laws and should report violations without worrying about employer abusing their powers against them. The whistleblower 's complainants also have the option to be removed once the complaint has been pending at the Department of Labor for 180 days. Employees have many protections under the Sarbanes-Oxley Act and should report unethical and illegal behavior to help the United States get rid of these corrupt business
practices.
References
Boone, L.E., & Kurtz, D.L. (2013). Contemporary Business. John Wiley & Sons
Bredeson, D. & Prentice. R. (2010). Student Guide to Sarbanes-Oxley Act. South-Western
Mesmer-Magnus, J. R., & Viswesvaran, C. (2005). Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation. Journal Of Business Ethics, 62(3), 277.
Stempel, J (2014, March). JPMorgan whistleblower gets $63.9 million in mortgage fraud deal. Retrieved from http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower- idUSBREA261HM20140307