The goal is to curb illegal or unethical activity and ensure those who know about it feel comfortable reporting it.
Why Should I Choose to Act as a Whistleblower?
There are many reasons a person might opt to “blow the whistle” on wrongdoing in the workplace.
Why would someone whistleblow?
- He or he might understand that what’s happening is hurting other people and want to make things right. For instance, the illegal activity that was occurring within the financial sector cost innocent people their life savings. Had someone chosen to be a whistleblower early on, it could have prevented clients of these companies from experiencing so much financial damage.
- Another reason people choose to be whistleblowers is that they don’t want to get into trouble. If you are employed by a company and participating in wrongdoing, you can be held legally accountable, even if you were not the initial perpetrator.
- Finally, whistleblowers take action because they stand to benefit financially. Depending on the circumstances, whistleblower is entitled to receive a portion of the money that is recovered once the investigation into wrongdoing is complete.
The amount of money given to whistleblower can be significant. In 2014, the SEC awarded a whistleblower $30 million and in 2016, it awarded $22 million to a former Monsanto executive.
The reward for whistleblowing can remove a great deal of the burden that comes from reporting your employer and potentially sabotaging your livelihood.
It should be noted, whistleblower protection ensures you won’t lose your job for reporting your knowledge of wrongdoing. However, you might choose to work elsewhere or your report could result in drastic overall changes for your employer. The financial rewards available in whistleblowing are intended to ease this burden.
The primary goal of whistleblower laws? To protect and promote integrity in American industries and reward those who report wrongdoing.
Whistleblower Laws Protect Americans
Corruption and fraud exist at all levels, and employees of companies in many different industries are exposed to wrongdoing on a daily basis. Oftentimes, these actions hurt the American public. Whistleblowers choose to stand up for what is right and report information that might otherwise never be identified.
Whistleblowers have played a significant role in identifying financial and other crimes and exposing corporations, including:
- Bank of America
Whistleblowers have stood up to industries including construction, healthcare and pharmaceuticals, defense, education, and finance. These are brave individuals reporting the wrongdoing of major companies, having the nerve to come forward to end corruption and fraud.
Whistleblower Laws are Part of the Country’s History
Whistleblower laws are nothing new. They’ve been in place since the Civil War and used to protect American consumers from corporate wrongdoing.
The country’s oldest whistleblower protection law, the False Claims Act, ensured that any citizen who shared information with the government about contractor fraud would receive a portion of the money recovered in the investigation.
Over the years, whistleblower laws have expanded and strengthened, and now feature stronger penalties for companies and better protection for those who report wrongdoing. Rewards for whistleblowers have also increased and some people stand to receive as much as a quarter of the money recovered from an investigation that occurs as a result of their report.
Following the economic collapse of 2008, the government instituted the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law features one of the strongest whistleblower programs ever instituted. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are responsible for enforcement of Dodd-Frank, and also work to enforce their own individual programs.
Under Dodd-Frank, anyone who reports financial crimes stands to benefit financially. These crimes include:
- Financial reporting fraud
- Insider trading
- Being dishonest with investors
Whistleblowers are an important part of stopping fraud and preventing crime. Evidence shows it works as a deterrent, too. One University of Iowa study showed that whistleblower laws have improved corporate behavior, especially regarding environmental safety, public health, and economic honesty.
Whistleblowers laws are important in today’s modern business world and will continue to be so for years to come.