An article titled Whistleblower Rule: Business Leaders Want it Changedreports on SEC rules giving corporate whistleblowers an opportunity to obtain substantial monetary awards for reporting securities law violations. The rule has alarmed the business community, which argues that the plan would encourage frivolous claims and undermine a decade of work to provide safe reporting channels for whistleblowers. The articles states:
A key point of contention is whether the whistleblower should be required to report internally first. The SEC proposal would give the employee the choice of going directly to the government, and would protect the tipster’s “place in line” for the bonus by using the date of any internal reporting in determining whether the information qualified for a payout.
Whistleblowers almost always attempt to report internally and face retaliation while their concerns are squashed, said Jason Zuckerman . . . .”While some companies have established robust compliance programs, there are also corporate compliance programs that are just window dressing, especially in organizations where senior management is condoning or orchestrating fraud to increase profits,” Zuckerman said. “When a corporation has an opportunity to deal with an issue before the issue is provided to the SEC, that can be an opportunity for the corporation to destroy evidence and to influence what the key witnesses are likely to say to the SEC.”