Whistleblowing & Hotlines

Below is some of the most recent Compliance Week coverage related to whistleblower provisions and developments. This includes articles on the SOX whistleblower provisions, court developments, and internal "best practices," as well as global guidance (i.e., in France and Germany) and recent complaints and standards. See also Compliance Week's database of whistleblower guidelines, which describes procedures for the receipt of complaints at numerous public companies.

Tyco in Hot Water Once Again After FCPA Settlement

October 02, 2012

Tyco's $27 million settlement on FCPA charges last week could be a bit dispiriting to compliance officers; after all of that company's prior troubles and attempts to improve, it's in trouble again? Take heart in the silver lining that Tyco's vigorous efforts at self-disclosure and cooperation do seem to have led to much less punishment than what could have been meted out. Our full look at the case is inside.
 

Hotline Benchmarking Report Reveals Insight Into Compliance

July 24, 2012

A recent report on compliance hotline calls has some alarming findings: fraud and instances of retaliation against those who report it are on the rise. Cases related to fraud hit 21.1 percent of all reports last year, up from 13.6 percent in 2007. "The fact that we're continuing to see this level, even though the recovery is going on, is a surprise," says Luis Ramos, chief executive officer of The Network, publisher of the report.
 

Study: Whistleblowers Want Anonymity, Monetary Rewards

January 10, 2012

Whistleblowers are far more likely to report wrongdoing if they are given a monetary reward, anonymity, and protection from retaliation, says a recent survey by law firm Labaton Sucharow. Since only the SEC is paying a reward right now, that's bad news for compliance departments. But two-thirds of respondents said they weren't aware of the SEC's whistleblower program launched last year. More results inside.
 

Whistleblower Complaints Speak Volumes

November 29, 2011

The SEC has published its first analysis of whistleblower complaints it has received, and compliance officers have plenty to digest. "Companies should be concerned. If you look in broad view, [the program] is still in its infancy, no award has been given out yet, and they are showing this number," says Steven Pearlman of law firm Seyfarth Shaw. A breakdown of all the data is inside.
 

Companies Fear Lawsuits, Higher Costs From Whistleblower Rules

April 26, 2011

As the SEC prepares to issue final rules on the whistleblower provisions of the Dodd-Frank Act, companies are raising concerns that the regulations will lead to more frivolous claims, more lawsuits, and higher compliance costs. Worse, companies say they will face fraud claims from unnamed sources that will be nearly impossible to investigate. Details inside.
 

Supreme Court Ruling Opens Door to More Retaliation Claims

February 08, 2011

The risk of whistleblower retaliation complaints just increased again, thanks to a U.S. Supreme Court ruling in favor of a man who claimed his employer fired him as punishment for a discrimination claim made by his fiancée. Retaliation claims are "easy to make these days, and they just got easier," says John Doran of Greenberg Traurig.
 

Latest on Whistleblower Rules: Nothing Good

January 24, 2011

Few issues burn up Compliance Week Editor Matt Kelly's e-mail box these days as much as the new whistleblower bounty rules soon to come from the SEC. Unfortunately, he writes, the latest signs from Washington suggest nothing good for corporate compliance departments. More inside.
 

Unintended Consequences of the SEC Whistleblower Program

December 13, 2010

The SEC's whistleblower bounty program isn't yet in place, but that hasn't stopped critics from pointing out some unintended consequences that could come from the rule. They say that the SEC will be overwhelmed and that whistleblowers will avoid reporting concerns to internal compliance programs. More details inside.
 

The Countdown to a Whistleblower Bounty Begins

November 09, 2010

Compliance executives, heres your chance: The Securities and Exchange Commissions proposed rules to pay whistleblowers who report securities violations are now out for comment.
 

Dodd-Frank Whistleblower Proposals Arrive

November 03, 2010

Let the comments commence: Compliance professionals finally have the details of the Securities and Exchange Commission's proposed rules to pay whistleblowers who report securities violations.The proposals, detailed in a 181-page release published for comment Nov. 3, implement the Dodd-Frank mandate to set up a program to pay awards of up...
 

Proposed Whistleblower Rules Promote Internal Reporting

November 03, 2010

As we have discussed thoroughly here at Whistleblower Week Compliance Week, new whistleblower provisions were included in the Dodd-Frank Act that are expected to have major effects on both public companies and the SEC. Today, the Commission unanimously voted to propose a whistleblower program under Dodd-Frank that will to reward individuals...
 

Whistleblowers, Naked Access, Swaps on SEC Agenda

October 27, 2010

Compliance executives should soon get some much-desired clarity about how the new whistleblower bounty program provided for by the Dodd-Frank Act could impact their companies.Proposals related to the whistleblower provisions are among the items on the agenda for a Nov. 3 Securities and Exchange Commission open meeting.The SEC will consider whether to propose rules...
 

Podcast: Whistleblowing Rules Under Dodd-Frank Act

October 08, 2010

We talk about expanded whistleblower protection rules under the Dodd-Frank Act with Steve Fagell, a white-collar defense lawyer at the law firm Covington & Burling.
 

SEC Sets Dodd-Frank Rulemaking Schedule

September 28, 2010

Corporate compliance departments now have a better sense of when the Securities and Exchange Commission will start pounding out new rules to implement the Dodd-Frank Act.
 

The Directors’ Role in Special Investigations

September 14, 2010

Amid increased public scrutiny of corporate boards, directors are feeling more pressure than ever to be vigilant in their oversight duties. One of the less pleasant tasks they may face: overseeing a special investigation. And thanks to the newly enacted Dodd-Frank Act, that task may become much more common, too.
 

Pitfalls Emerge in Dodd-Frank Bounty Provision

September 08, 2010

In a span of just six weeks, the whistleblower provisions in the recently enacted Dodd-Frank Act have gone from a little-known sleeper section of the law to one of its most highly scrutinized provisions. Congress has been vocal that the whistleblower provisions are a smart way to uncover more fraud—at no cost to the taxpayers, they say, since the funds used for whistleblower bounties will come out of penalties companies pay to the Securities and Exchange Commission.
 

Notes of Concern on Whistleblowing

September 01, 2010

My friend the Corporate Secretary called me the other day. He works at a consumer products company, and we chat every now and then about various compliance and governance issues. On his mind this time: the new whistleblower reward program established by the Dodd-Frank Act, and how it might ruin...
 

Dodd-Frank Causes New Oil & Gas Pains

August 24, 2010

A broad new disclosure provision tucked into the Dodd-Frank Wall Street Reform and Consumer Protection Act is poised to cause plenty of consternation for those in the energy industry.
 

Common Questions About GRC, and Some Answers

August 24, 2010

Earlier this summer I participated on a panel at the Institute of Internal Auditors international conference, held this year in Atlanta. The subject of the panel was governance, risk, and compliance, covering a range of matters raised by the moderator and enthusiastic participants. Compliance Week readers often have similar issues on their minds, so I’d like to share my responses to some of the questions raised. Since I don’t have notes, I’ll do my best in reconstructing my remarks.
 

More Whistleblower Reforms in Dodd-Frank Act

August 17, 2010

Companies ought to prepare for another potential headache stemming from the recently passed Dodd-Frank Act: An uptick in whistleblower retaliation claims.
 

Changes in Enforcement Thanks to Dodd-Frank

August 03, 2010

You may feel like the Dodd-Frank Act has been with us for months already, but President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law only two weeks ago. Lawyers, bankers, auditors and compliance executives have now had several weeks to digest the final version of the 2,300-page law, and how it will affect their clients and industries.
 

Audit Committee Checklist: Compliance Programs

July 27, 2010

In recent years, audit committee members have seen the scope of their responsibilities expand in all directions—but none so much as in their oversight of ethics and compliance.
 

How Did BP’s Risk Management Lead to Failure?

July 20, 2010

We all know the damage caused so far by the explosion of BP’s Deepwater Horizon offshore oil rig in April: 11 workers killed, economic ruin across the Gulf Coast states, environmental ruin along the Gulf Coast itself. And efforts to stop the continuing undersea oil spill keep falling far short of the solution that’s desperately needed.
 

SEC Bounty Program May Complicate Whistleblowing

July 07, 2010

As compliance officers spend the summer poring over the 2,000-plus pages of Congress’ regulatory reform bill, they might want to pay particular attention to one provision about whistleblowing that could become a big deal for all public companies.
 

U.K. Enforcement Agencies Brace for Shake-Up

June 29, 2010

Britain’s new coalition government is pushing ahead with its promise to dismantle the country’s Financial Services Authority and create a new agency to fight white-collar crime. But already concerns are emerging that the move could stall enforcement efforts, especially against insider trading.
 

Risk and Audit Information Directors Want to Hear

June 08, 2010

Board directors can be a demanding lot. For the compliance officers trying to report the right information to them about risks, compliance, and other elusive data, working with directors can be that much harder.
 

Senate Chews Through Amendments to Dodd Bill

May 18, 2010

Anyone in the corporate governance world wondering when Congress will move forward with its massive reform of financial regulation will need to keep waiting.
 

Podcast: Healthcare Reform and Whistleblowers

May 14, 2010

Mychal Schulz, a partner at the law firm Dinsmore & Shohl, talks about reforms to protection for corporate whistleblowers included in the recent healthcare reform laws.
 

Bracing for New Compliance World of Healthcare Reform

May 11, 2010

Only time will tell whether the healthcare reform laws passed by Congress this spring will be the salvation Democrats promise or the nightmare Republicans predict. One consequence, however, has already become clear: Enforcement of anti-fraud laws will increase dramatically.
 

A Glimpse Into SEC Enforcement, by Way of Goldman

May 11, 2010

In a time of ongoing heightened scrutiny for the Securities and Exchange Commission, many current and former leaders of the SEC’s Division of Enforcement met recently for an extraordinary panel discussion at the National Press Club in Washington, D.C.
 

Ruling Expands Scope of Whistleblower Protections

April 20, 2010

A federal judge in Massachusetts has fired a dramatic new volley in the battles over who can file whistleblower retaliation claims under Section 806 of the Sarbanes-Oxley Act, ruling that two employees of a private contractor to Fidelity Investments can pursue retaliation complaints against Fidelity, because the business ultimately serves investors in public companies.
 

Healthcare Reform Expands False Claims Liability

April 13, 2010

The healthcare reform law passed by Congress last month has yet another surprise for corporate legal and compliance departments: It allows yet more whistleblower lawsuits to be filed against corporations under the False Claims Act.
 

Whistleblowers Gain Ground on Retaliation Suits

April 13, 2010

Corporate whistleblowers suing employers for alleged retaliation may be gaining more traction in the legal system, with two plaintiffs recently winning reinstatement of their jobs and back pay through the Department of Labor.
 

Innospec Settlement Shows Latest FCPA Thinking

April 06, 2010

Ethics and compliance officers might want to pay special attention to the Justice Department’s recent settlement of Foreign Corrupt Practices Act charges against chemical company Innospec, which is emerging as the latest cautionary tale about overseas bribery, self-disclosure, and global anti-corruption enforcement.
 

Learning From Culture Mistakes at Toyota, J&J

March 23, 2010

Oh, how the mighty have fallen—or at least seen their reputations for quality products and “doing the right thing” for customers badly damaged. Let’s take a look at two recent high-profile cases.
 

Shop Talk: Fostering a Strong Anti-Fraud Effort

March 09, 2010

Statistics differ over whether or not fraud rises in a difficult economy. For ethics and compliance officers, however, the true answer is also somewhat beside the point: the challenges of fighting fraud are rising, regardless.
 

Providing Directors the Risk Information They Need

February 17, 2010

My column last month outlined the kind of information boards of directors need to execute their responsibilities, viewed from the director’s perspective. This month I want to continue that discussion, but looking at the opposite side of the coin: what information chief executives, chief compliance officers, chief risk officers, and other top executives should be providing to help directors in their oversight activities.
 

Court Ruling Opens Door to Whistleblower Litigation

January 12, 2010

A federal appeals court has just opened the door for corporate whistleblowers considerably more, ruling that the ex-employee of an instrumentation company has the right to argue his retaliation complaint in federal court because the Labor Department wasn’t moving quickly enough to resolve the issue.
 

Dissecting the Investor Protection Act

January 12, 2010

In December the U.S. House of Representatives passed a key financial reform bill, the Wall Street Reform and Consumer Protection Act of 2009, which would provide sweeping new oversight of the financial sector. The bill, which passed the House narrowly and without a single Republican vote, includes new regulations in a host of areas of interest to Compliance Week readers, such as exempting certain filers from compliance with Section 404(b) of the Sarbanes-Oxley Act. It also creates a new Consumer Financial Protection Agency to regulate financial products sold to the public, and a Financial Stability Council to identify and regulate particularly risky financial firms.
 

Nine Cases to Shape the 2010 Legal Landscape

January 05, 2010

2009 was a notable year for securities litigation and regulatory enforcement, as the first consequences of the financial crisis had their days in court. Expect more to come in 2010.
 

Parsing the House Reform Bill

December 22, 2009

The new world of corporate governance is now halfway to reality.
 

Strategies to Reduce Corporate Fraud

December 01, 2009

Attendees at the annual CFO Summit at the Massachusetts Institute of Technology on Nov. 19 heard from federal regulators promising no end to their fraud crackdown of recent years, as well as from other corporate executives offering their ideas on how to maintain ethical operations amid difficult economic circumstances.
 

Wisdom of Corporate Compliance, Even in Government

Moschella, Compliance Week Guest Columnist Emil December 01, 2009

This past October, two victims of Bernard Madoff’s Ponzi scheme filed a lawsuit against the Securities and Exchange Commission. Their complaint: shoddy oversight and controls at the SEC let Madoff continue his fraud for years, despite numerous warnings and tips.
 

Congress Goes Full Bore on Governance Legislation

November 17, 2009

Executives who worry about corporate compliance or governance should be watching Congress closely right now: No matter what your particular responsibility is, Washington seems to have plans for you.
 

Board of Directors’ Hot Buttons

November 17, 2009

With memories of the financial crisis still fresh in our minds and questions of “Where were the boards?” still abounding, today’s directors face extraordinary challenges.
 

Sweep of False Claims Act Only Gets Bigger

October 27, 2009

As the government ramps up its war on fraud, companies ought to prepare to do battle with more False Claims Act lawsuits.
 

Recent Court Decision Clarifies Whistleblower Law

August 25, 2009

An important federal appeals court has just shed a little more light on how much ammunition workers have when suing corporations under the Sarbanes-Oxley Act for whistleblower retaliation.
 

Detainee Decision Casts Shadow on Corp. Lawsuits

August 18, 2009

Corporate legal departments are buzzing about a recent U.S. Supreme Court ruling over federal detention policies for would-be terrorists that could inadvertently have profound consequences for corporate litigation.
 

Disclosures: Compliance Week Databases & Spreadsheets

August 02, 2009

A list of databases available to subscribers of Compliance Week.
 

Best Buy Ethics Chief on Living the Values

July 21, 2009

In the latest of our conversations with players in the corporate governance and compliance field, we catch up with Kathleen Edmond, chief ethics officer at retail giant Best Buy.
 
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