Whistleblowing and Sarbanes-Oxley

Key characteristics of a whistleblower

The verb whistle-blowing refers to revealing the hidden actions of another individual or groups of people (mostly executives) of a company for wrong actions they perpetrate in the dark. A whistleblower is thus any person who exposes any information regarding illegal activity dishonesty, or correct activities within an organization. In many cases, whistleblowers are employees or ex-employee of a company (Green, 2004).. Among the essential characteristics of whistleblowers is that they are altruistically motivated. They do their actions to expose the truth so that a person suffering unfairly may get saved. Secondly, they are utilitarian. They serve to be useful rather than attractive. Thirdly, they are not interested in altering their behavior. They do what they do because they believe it’s the appropriate course. They, therefore, allow their attitudes and beliefs to drive them. In many cases, whistleblowers are well educated as only people with such wisdom can manage what they do. They are also aware that what they do is prone to danger and severe retaliation (Green, 2004).

Instance of whistleblowing

On the 11th of March 2016, two former students of Bard College revealed that the college officials were violating the False Claims Act that regards the federal grants and that which stipulates the use of Title IV student aid funds. These two whistleblowers had researched and found that Bard has for long received funds through the Teacher Quality Partnership Grant Program though they the college has not yet complied with the conditions of such grant. Bard was also allegedly reported to be awarding, disbursing and receiving Title IV student loan funds at campus locations though such were not yet recognized. They also did so without providing notice of the locations to the Department of Education. Such actions showed an infringement of applicable regulations and agreement with the Department of Education. The case is still not solved and until the Court decides the fate of the culprits, the effect of the whistle-blowing to the whistleblower and the institution’s heads may not be determined. However, the prospective effects might be the jailing or fining of the Bard College heads. More so, the court might decide to demote them. The whistleblower might face threats from those persons that they exposed (Newman 2016).

Justification of the whistleblowers’ reporting

In any case, the actions of the whistleblowers were justified. Any publically traded company or any government institution represents is there to serve the people rather than inflict pain or take the public’s money without their consent. The government takes a lot of taxes from the public which it uses to pay for the services of workers of public institutions. It is thus wrong for these few individuals to grab or siphon the money once more from the public funds. As a matter of facts, it’s only the whistleblowers who might find out such actions as perpetrators do it hidden. Their actions were thus justified as they saved the public from continued fraudulence (Green, 2004).

Extent to which the whistleblower would be protected under the Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002 was developed and passed by the U.S. Congress to guard shareholders as well as the general public from such things like accounting errors and fraudulent practices. It was also aimed at improving the accuracy of commercial disclosures (Green, 2004). Section 806 of the Sarbanes-Oxley Act would protect the whistleblowers against harm by the Bard’s heads for providing information about financial fraud. However, the two had to show that an actual violation occurred. It would then protect them against retaliatory actions such as threats or discrimination (Green, 2004).

References

Green, S. (2004). Manager's Guide to the Sarbanes-Oxley Act: Improving internal controls to prevent fraud. Hoboken, N.J: Wiley.

Newman J.(2016). Articles Posted in Whistleblower Cases.

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