Whistleblowers Spur Companies To Change Their Ways reports Gretchen Morgenson in the New York Times.
Jaron H. Wilde, an assistant accounting professor at the University of Iowa, studied corporations that had been subject to a whistleblowers report to the Securities and Exchange Commission under the Sarbanes-Oxley Act, which was enacted in 2002 following the massive, massive fraud that went on at the Enron Corp. and elsewhere. Professor Wilde's study concluded that whistleblowers did have some good effect on straightening up and deterring cheating at the companies involved. Professor Wilde's study will be published in a forthcoming issue of The Accounting Review.
The benefits of whistleblowers' courageous actions are substantial: "The S.E.C. has awarded $136 million to 37 whistle-blowers since its program’s inception in 2011; it says that enforcement actions arising out of these tips have resulted in almost $900 million in financial remedies, much of which went to wronged investors," according to the Times.
Whistleblowing under the Sarbanes-Oxley Act is only one of a number of means by which employees can report corporate wrong-doing. All require great courage by the individuals involved, who will be called a liar and worse by the company's lawyers etc.
Lexington, Kentucky whistleblower lawyer Robert Abell represents individuals and employees in whistleblower cases in both the public and private sectors; contact him at 859-254-7076.
