This guest post is provided by Peyton Harmon
(Editor’s Note: Exposing wrong doing in companies takes a lot of courage. In small business, I think we need to do whatever we can to support it- Barry)
In many cases where a company in the financial services industry has been convicted of corruption, it has been due to the efforts of an individual employee or group of employees who have become whistleblowers. A precarious step to take, it can open these employees up to acts of retaliation by their employers. However, thanks to the creation of the SEC Whistleblower Program, it has now become possible for employees to expose corruption in the workplace without fear of retaliation.
Created in part to curb the excess corruption that was occurring on Wall Street and across the U.S. in the early stages of the 21st-century, the program’s purpose is to not only help expose companies guilty of illegal and criminal financial activity, but also give employees who choose to become whistleblowers the incentives and protections they need to come forward with their information. Therefore, numerous tips have now been received by the SEC and other agencies, allowing them to use their resources to stop various illegal activities that severely hurt consumers.
As more individuals have become aware of the program’s existence, more and more information has been provided by whistleblowers. In fact, in 2016 alone there were more than 4,200 tips submitted, representing a tremendous increase from previous years. Of the information provided, over 65% of whistleblowers were determined to be company insiders, and 25% decided to provide their information anonymously. However, to ensure the information that is provided by anonymous whistleblowers is accurate and reliable, certain precautions are put in place through the program’s guidelines.
To start with, any anonymous whistleblower must have representation from an attorney or law firm and will be required to have legal representation throughout the entire process. Along with this, the individual or group submitting the information about a company must provide their legal counsel with a signed whistleblower submission form, which must be signed by all parties under the penalty of perjury. Once this is done, if the information provided allows investigators to levy sanctions against a company, the lawyer representing the whistleblower can then advocate for as large an award as possible for their clients. In most cases, those who have provided credible information that led to sanctions being levied receive a portion of those sanctions, usually between 10-30 percent of the total.
In addition to having financial incentives to report wrongdoing, whistleblowers can also do so knowing the program’s guidelines prohibiting employer retaliation give them added protection. Thus, an office employee or other individual at a company can report information without worry of being fired, demoted, harassed, or provided a hostile work environment. If any of this does occur, they can have their case heard in federal court very quickly and are often awarded such damages as double back pay, reinstatement to their job with full seniority, and reimbursement for legal costs, including attorney fees, court costs, and fees charged by expert witnesses. By having these levels of protection, whistleblowers have the confidence to come forward to expose potentially serious crimes.
