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whistleblowers 13 articles

Whistleblowers prompt corporate reform, new study finds

Companies that have engaged in corporate fraud, regulatory violations, and other wrongdoing resulting in financial harm are inclined to clean up their act after a whistleblower exposes internal misconduct, a new University of Iowa study has found. According to the New York Times, new research by Jaron H. Wilde, assistant professor of accounting at the University of Iowa’s Tippie College of Business, shows “a sharp and lasting drop in financial wrongdoing at companies that were subject to whistleblower investigations.” The study, which will be published in The Accounting Review, looked at cases of whistleblower activity in 317 public companies in ... Read More

Whistleblowers Can Help Their Companies Avoid Catastrophe

Thanks to stronger protections and incentives,” life is getting better” for corporate whistleblowers who call out corruption, fraud, and other wrongdoing, The Economist reports. Still, many big companies prefer to punish whistleblower rather than praise them, failing to see how whistleblowers can sometimes avoid costly errors and even save the company from itself. Recent examples proving this point, as The Economist reported this week, are the troubles bearing down on German automaker Volkswagen and Japanese airbag manufacturer Takata. Both companies have become have become bogged under allegations of massive fraud that threaten the companies’ image and financial health. Had either ... Read More

Whistleblower gets $300,000 award for providing tips to SEC

The Securities and Exchange Commission (SEC) has awarded a whistleblower $300,000 for exposing wrongdoing within a securities company. According to the SEC’s Office of the Whistleblower, the employee had audit and compliance functions within the company. The employee reported the misconduct to company supervisors repeatedly, but they failed to take appropriate action to correct the situation. The award is the first the SEC has given to a whistleblower with an audit and compliance role within a company. It comes amid a national debate on whether employees whose jobs involve monitoring company activity for regulatory and legal compliance should be permitted ... Read More

SEC announces record $30 million whistleblower reward

The U.S. Securities and Exchange Commission (SEC) said Monday that it will pay a whistleblower more than $30 million for providing the agency with original information that was key in helping secure a successful enforcement action and recovery. The award is the largest ever the SEC has paid to a foreign whistleblower and is the fourth award the regulator has paid to a whistleblower in a foreign country, demonstrating the international reach of the SEC’s Office of the Whistleblower since it opened in July 2010. “This whistleblower came to us with information about an ongoing fraud that would have been ... Read More

U.S. Attorney General Holder calls for better whistleblower rewards in financial industry

Whistleblowers who help expose fraud and other misconduct in the financial world could earn bigger rewards in the future in exchange for the efforts, if U.S, Attorney General Eric Holder has his way. Threats brewing in the financial industry today have come to resemble some of the dubious greed-driven behaviors that devastated the U.S. economy in 2008 despite the government’s efforts to prevent a similar catastrophe from recurring in the coming years. “We are already witnessing a troubling return to some of the very same profit-driven risk-taking that contributed to the 2008 collapse,” Mr. Holder said in a speech Wednesday ... Read More

Dodd-Frank whistleblower provisions don’t protect overseas whistleblowers, appeals court says

The anti-retaliation provisions of the Dodd-Frank Act do not protect whistleblowers outside the United States, a federal appeals court ruled last week, upholding the decision of a lower court that struck down a lawsuit filed by a Taiwanese national against Siemens AG. Liu Meng-Lin, a former compliance officer at Siemens China, sought the whistleblower protections afforded by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibit companies from retaliating against employees who call out fraud and other wrongdoing to federal regulators. Mr. Liu alleged that he was fired after he took his concerns over an alleged kickback ... Read More

SEC awards whistleblower $400K after internal complaints of fraud fail

A whistleblower who turned to the Securities and Exchange Commission (SEC) after his concerns of fraud fell on deaf ears within his company has received a $400,000 reward, the agency announced. The SEC said in an announcement that the whistleblower provided credible tips and other information that helped the agency to complete an investigation faster than it would have been able to do without the help. Another government agency had already initiated an investigation of fraud and misconduct within the company when the whistleblower approached the SEC, a circumstance that would normally preclude a whistleblower case from being accepted by ... Read More

SEC settles first-ever whistleblower retaliation case for $2.2 million

The Securities and Exchange Commission (SEC) has settled its first whistleblower retaliation case since financial reforms introduced under the 2010 Dodd-Frank Act strengthened whistleblower protections. According to the SEC’s Office of the Whistleblower, Paradigm Capital Management, an Albany, N.Y.-based hedge fund advisory firm, and its owner Candace King Weir “engaged in prohibited principal transactions and then retaliated against the employee who reported the trading activity to the SEC.” Ms. Weir and her firm agreed to pay $2.2 million to resolve the charges. The whistleblower alleged that Ms. Weir conducted transactions between Paradigm and a broker-dealer that she also owns while ... Read More

New Jersey business groups urge court to toss Ethicon whistleblower case again

The New Jersey Supreme Court’s Appellate Division last year decided to revive a whistleblower lawsuit against Johnson & Johnson’s Ethicon unit, triggering a backlash from state business groups who argue that the case effectively would allow employees in watchdog positions to file improper whistleblower lawsuits. Law360 reports that the New Jersey Business & Industry Association and the New Jersey Civil Justice Institute filed a brief June 2 urging the high court to overturn the Appellate court’s decision. They are the latest tort-reform minded groups to push back against the decision, saying that it improperly broadens the state’s whistleblower law by ... Read More

Nuclear contractor settles whistleblower allegations for $2.7 million

General Electric Hitachi Nuclear Energy has agreed to pay the U.S. government $2.7 million to resolve allegations made by a whistleblower under the False Claims Act that the company concealed potentially disastrous flaws in an advanced nuclear reactor it designed and made false statements and claims to federal authorities and agencies about the reactor. General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi), headquartered in Wilmington, N.C., provides nuclear products and services to the federal government. The company is a jointly owned subsidiary of Fairfield, Conn.-based GE and Hitachi of Tokyo, Japan. According to the U.S. Justice Department, GE Hitachi ... Read More