What are the Pros and Cons of Whistleblowing

The pros of whistleblowing outright are countless. For example, employees can receive a monetary reward for their efforts, protect future investments, avoid retaliation, and bypass the corporate chain of command. But what are the cons of not blowing the whistle on wrongdoing? Read on to discover the pros and cons of whistleblowing. And remember that your financial sanity is at stake, too.

Employees can receive a monetary reward

In the US, employees can receive monetary rewards for whistleblowing in various forms, such as lawsuits, financial incentives, and other rewards. These rewards are often tied to the type of illegal activity reported. For example, an employee can receive a reward for reporting fraud. The amount of the reward depends on the type of illegal activity reported and the amount of the employee’s involvement. But regardless of whether an employee chooses to seek a monetary reward for whistleblowing, it is still possible to secure a large payout.

The Dodd-Frank scheme only provides a small incentive to employees who disclose misconduct. It only pays out if the information leads to an enforcement action or a lesser sanction. The result is that this is more of a performance-related incentive than a monetary reward. Fortunately, UK law already allows employees to receive monetary rewards for exposing wrongdoing and reporting illegal activity.

They can avoid retaliation

If you are concerned about the potential for retaliation from your employer, you should consider reporting misconduct to the appropriate authorities. Many federal laws protect employees who report violations of the law. The Sarbanes-Oxley Act protects employees from discrimination and harassment, and other federal laws protect employees who report violations of the law related to health codes, family leave, and wage and hour laws. Even though the Sarbanes-Oxley Act does not specifically mention whistleblowers, you should not worry about retaliation from your employer if you report a violation of any of these laws.

In addition, the Department of Labor’s Administrative Review Board has ruled that attorneys can introduce privileged communications to establish retaliation in whistleblowing cases. This decision makes it clear that attorneys can introduce privileged communications into a whistleblower retaliation case if the information is “reasonably necessary” to take legal action. The Department of Labor’s case law has made this more complicated for whistleblowers.

They can protect investors from future loss

SEC and CFTC whistleblower programs have been remarkably effective. In FY 2019, the SEC reported nearly $4 billion in monetary sanctions and almost $100 million in whistleblower rewards. In the last five years, the CFTC has recovered about $1.3 billion in investors’ ill-gotten gains, and collected nearly $4 billion in monetary sanctions. The whistleblower program has also allowed the SEC to expand its knowledge base, as whistleblower tips provide information about fraudulent activities that hurt U.S. investors. Furthermore, this information helps the SEC optimally target its limited resources, which is necessary to protect investors.

Whistleblowing is an important way to protect investors from future loss. By reporting fraud or abuse of securities laws, investors can protect themselves from hefty fines and even future exclusions from the company. Whistleblowers are often protected by the Dodd-Frank Act, which protects them from retaliation if they report securities fraud or other securities violations.

They can bypass the chain of command

Some organizations discourage employees from making public complaints about violations of ethical or legal standards. Bypassing the chain of command, employees can bypass the system that protects them and the organization. However, removing these barriers may undermine the integrity of management decision-making. In addition, whistleblowers may have less-than-honorable motives. They might be retaliating against their superiors or subpar employees. Regardless of the motives, whistleblowers may be trying to draw attention to legitimate problems.

In addition to federal laws, whistleblowers may choose to make a disclosure to multiple sources. These channels include the OSC, the IG, the agency’s leadership, Congress, and the media. Whistleblowing can be effective when it involves a public sector employee who has discovered improper behavior. The Detrich decision is nonprecedential, but it may be worth paying attention to it.

from lawyers.buzz https://lawyers.buzz/what-are-the-pros-and-cons-of-whistleblowing/
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