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Whistleblowers – Bounty Hunters?

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Whistleblowers – Bounty Hunters?

It won’t be long now until we see some big headlines coming out of the SEC Whistleblower Office. The program is almost a year old (officially) and, while there isn’t hard evidence to support it, the news mill says that things are stirring. For the most part, that’s good. We need to know that our taxes are reaping some results! What isn’t so good, however, is the trend toward rewarding the guilty. I fear that the first hand results will have the SEC paying out huge sums of money to whistleblowers who have done their company wrong, then run to the SEC to seek shelter and their bounty.

Speaking at the recent Compliance Week conference, Jane Norberg, deputy chief for the SEC’s Office of the Whistleblower, had some encouraging things to say about the program, which gives me some confidence in how things are going. As far as internal reporting prior to SEC filing and the value of compliance programs, she said that whistleblowers who first work within their internal compliance systems could see larger awards, while interfering with an investigation will shrink it. Thank goodness, Norberg pointed out that while internal reporting is not required, the SEC is actively encouraging whistleblowers to go first through their organization’s reporting structure (that’s the 120-day grace period for those who want to deal internally first and turn to regulators as a last resort).

The bad news: While those who do wrong may not totally get away with it, if they come clean with what they’ve done, they might still get a large payday. Norberg says, “Sometimes we need people with dirty hands to point us in the right direction.” True, but how close does this come to rewarding malfeasance? I don’t think for a minute that we’re talking about 100% immunity here, but let’s be careful about putting the double-whammy on organizations and make them dole out penalty money to those within their companies that did them wrong in the first place.

Looking at this from an ethical standpoint, I think that it’s a shame that we have to reward one wrong to penalize another. Just another very good reason to build an ethical workplace in the first place, then you won’t have to worry about it.

Ok, not as much, anyway.

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