Of course, if you become a whistleblower, it’s only natural to consider the impact this may have on you personally—how reporting may affect your career. You may be wondering if you would be subject to retaliation, or perhaps you’re thinking about the upside—the minimum award you could win. In September 2021, the Securities and Exchange Commission (SEC) announced that it had paid out more than $1 billion in rewards to whistleblowers since its new program began. In 2020, one whistleblower received a $114 million payout. But there are other factors to include in your decision to become a whistleblower. Ask yourself how your report might impact your industry, the markets, or even society as a whole?
If Not You, Who?
No matter what, the SEC will never be able to catch public companies that commit wrongdoing without whistleblowers. They don’t have the resources to look into every company; they need insiders to bring violations to their attention. Studies have shown whistleblowers are ferreting out the vast majority of fraud. PricewaterhouseCoopers concluded that whistleblowers were responsible for 43% of all fraud detection. That’s about ten times the amount revealed by external auditors. In 2017, 92% of the False Claims Act cases brought by the US Department of Justice came from whistleblowers—to the tune of $3.4 billion in settlements and judgments.
Cleaning Up This Town
Whistleblowing in one company can often catalyze industry-wide change. For example, Wells Fargo’s scandal—creating fake accounts, cross-selling, and more—directly impacted the company. The company and individual executives were fined millions; thousands were fired; there were multi-billion lawsuits. But the fall-out wasn’t limited to Wells Fargo. Every major bank immediately began reviewing its own sales practices. Bankers began to review (and change) employee sales compensation. They started reviewing customers’ account information and creating new internal reporting practices. And these weren’t one-offs. These and related topics were the focus of industry conferences and more.
Changing The Way We All Operate
Consider the cases of Worldcom’s Cynthia Cooper and Enron’s Sherron Watkins: Their whistleblowing didn’t just bring down the companies. They catalyzed the creation of the Sarbanes-Oxley Act of 2002, which created new regulations of publicly held companies—including new protections for whistleblowers that didn’t exist for Cooper or Watkins. Their efforts literally changed the regulatory landscape for all public companies.
And whistleblowing pushes companies into maintaining better ethics and compliance programs. Studies show whistleblowing on one issue often motivates others to come forward with completely different issues. Over time, complaints go up, but ultimately these give companies more motivation and information to remedy—and ideally prevent—future problems.
If you are thinking about whistleblowing, consider hiring the securities attorneys at the Silver Law Group and the Law Firm of David R. Chase. Counselors in whistleblowing matters with many years of experience, we can help you through every step of the process. For a free, confidential consultation, contact us through our website or call us today at (800)975-4345.