A Record Year for Whistleblowers
It’s Been a Good Year for Whistleblowing
According to the U.S. Securities and Exchange Commission’s annual report, which was released earlier this month, they received more than 3,500 whistleblower tips in the 2014 fiscal year. That’s the most tipoffs they’ve had since the SEC whistleblower program came into effect in 2010 with the Dodd-Frank Wall Street reform.
The report stated that the SEC received over 2,700 phone calls from the public in the past year, with their tips coming from every single state—including Washington, D.C. and Puerto Rico. The largest number of tips came from California, Florida, New York, and Texas.
The SEC’s reach didn’t just stop at the States—they also got a bunch of tip-offs from Britain, India, China, Canada, and Australia.
In one interesting case in the SEC report, they mentioned that there was actually one particularly… enthusiastic, let’s say, individual who attempted to “blow the whistle” 143 times in the past year—all of which were “false and baseless claims” that the SEC threw out. According to the SEC, that same individual had previously made 53 false claims in past years.
New research supports whistleblower programs
This uptick in whistleblower tips is a very good sign, especially since a new study out of American University is suggesting that the benefits of whistleblower programs greatly outweigh the costs.
According to this study, titled “The Impact of Whistleblowers on Financial Misrepresentation Enforcement Actions,” the penalties in cases where whistleblowers were involved were $92.88 million more than when no whistleblower was involved, and those involved in the wrongdoing reported on by the whistleblower were given a longer prison sentence.
Using data from whistleblower cases over the period of 1978 to 2012, the researchers suggest that, with the help of whistleblowers, regulators have been able to successfully obtain “addition judgments of $21.27 billion more” than they would have without whistleblowers. That’s a whole lot of help.
The researchers hope that these positive findings will go a long way to supporting and improving the efficacy of whistleblower programs.
It’s a good time to implement a whistleblower program
Now that you know how useful whistleblowers can be, isn’t it time to make sure that any potential whistleblowers at your workplace can be heard? Not only do these reporting mechanisms satisfy the mandate of Sarbanes-Oxley for public companies, and the credibility for non-profits and private organizations, you also look better in the eyes of your employees because you are seen as taking a stand against workplace misconduct, and valuing your employees feedback. They will feel like critical contributors to the company, and you’ll look good making that happen.
Implementing an ethics reporting system in your workplace is just smart business.