More than three-quarters of Americans would blow the whistle on wrongdoing at their workplace, according to a newly released survey — but only if they could do so anonymously, without fear of reprisal, and — and this is a big “and” — there was a monetary reward involved.
The survey, conducted by business and securities law firm Labaton Sucharow, was designed to test public awareness of the new whistleblower program established by the Dodd-Frank financial reform legislation passed by Congress and signed by President Obama in 2010. That law strengthened whistleblower protections against retaliation and provided for financial incentives to report wrongdoing.
One of the more eyebrow-raising findings of the poll was that 34 percent of respondents said they knew of “wrongdoing” in their own workplace. But 68 percent said they were not aware of the new federal whistleblower program, which is being operated by the Securities and Exchange Commission.
“It is disheartening to see that wrongdoing in the workplace continues to be so widespread,” Jordan Thomas, head of Labaton Sucharow’s whistleblower practice, said in a statement accompanying the survey results. “However, the findings affirm the need for, and value of, the SEC’s Whistleblower Program. This program, in concert with other regulatory reforms, has the potential to dramatically enhance investor protection and restore public faith in the markets.”
Prior to joining Labaton Sucharow, Thomas was a staffer at the SEC, where he helped develop the new whistleblower rules.
The financial incentive component of the whistleblower program is designed to give employees a substantial nudge — if their conscience alone isn’t sufficient — when faced with the choice of reporting or not reporting wrongdoing to the feds. The program offers awards of between 10 and 30 percent in cases where information leads to an enforcement action in which over $1 million in sanctions is ordered.
The SEC says the new whistleblower rules, which became effective on August 12, resulted in 334 complaints through the end of September. The most frequently reported alleged wrongdoing includes cases of market manipulation, offering fraud, insider trading, and cases involving corporate and financial disclosure. The agency received tips from 37 states, as well as several countries, including China and the United Kingdom.
Earlier this year, the CBS News program 60 Minutes reported the cases of two high-profile whistleblowers, Eileen Foster, a former senior executive at Countrywide; and Richard Bowen, a former vice president at Citigroup, who repeatedly warned higher-ups at their companies of fraudulent mortgage practices. Their warnings were ignored, they said, and both faced reprisals from their firms shortly thereafter.