This recent report from The Network outlines a profile of the average whistleblower that is, in many respects, contrary to the stereotype – and certainly instructive for companies. The report includes suggestions on how to foster a culture of reporting to mitigate whistleblower risks.
– Likely to be an actively engaged, well-performing employee – most likely a supervisor or high-level manager
– 92% report internally first.
– Only 20% ever share their concerns with anyone outside the company; 9% report to the government.
– Reasons for reporting externally run the gamut – with the most frequently cited being “a big enough crime,” but the least likely reason is the potential to receive a substantial monetary award. 65% of surveyed employees would be willing to report externally if their company was not responsive to their internal report.
– 1 in 5 whistleblowers purportedly experienced retaliation after reporting misconduct internally.
– 1 in 3 non-reporters cited fear of retaliation as their reason for not reporting internally.
– An astounding 1 in 5 whistleblowers are the company’s consultants and contractors – not employees.
As Broc blogged last week, on the heels of the SEC’s recently released Interpretive Guidance clarifying its position that an individual doesn’t need to report possible violations of the securities laws to the SEC to be characterized as a “whistleblower” entitled to Dodd-Frank’s anti-retaliation protections (rather, such protections are also available to individuals who report internally first), the Second Circuit – in a split decision – agreed with the SEC in Berman v. Neo@Ogilvy LLC that a Dodd-Frank whistleblower did not have to make a report directly to the SEC to bring a Dodd-Frank retaliation claim.
However, as discussed in Proskauer’s blog, in a fairly concurrent case, the US District Court for the Central District of California, in Jennifer Davies v. Broadcom, dismissed a whistleblower retaliation claim, ruling that Dodd-Frank’s anti-retaliation provision only protects whistleblowers who provide information to the SEC – thus again demonstrating a circuit split on this key issue.
Access heaps of additional surveys and other resources in our “Whistleblowers” Practice Area.
SEC Enforcement: Accounting-Barred Felon Resumes Practice Under Assumed Name
Even after decades of practice in the public company arena, I never cease to be amazed at what some people will do. After being convicted for wire fraud and attempted tax evasion, snitching on mobsters as a government informant and declining to go into the DOJ’s witness-protection program, and then having his accountant license revoked pursuant to an SEC order, Stephen P. Corso reportedly allegedly resumed providing accounting and consulting services to public and pre-IPO companies under the assumed name of Steven John Corso.
The SEC apparently has called on Corso to cease providing accounting services and surrender all improperly received compensation since 2009, and is investigating his activities as part of a potential enforcement action into a penny-stock fraud.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Board Basics: Director Effectiveness Reminders & Tips
– OSHA Clarifies Whistleblower Investigation Standard for Merit Finding
– Audit Committee Charters: Cybersecurity Oversight
– NYC Bar Opines on Ethical Duties for Internet Scams
– Board Evaluations: Back to Basics
– by Randi Val Morrison