When illicit activity lurks in the workplace, someone needs to speak up. During the symposium “What Would We Do Without Them: Whistleblowers in the Era of Sarbanes-Oxley and Dodd-Frank,” presented by the Fordham Journal of Corporate & Financial Law on Oct. 27, several legal experts discussed the importance of whistleblowers and the laws needed to protect them.
Whistleblowers—individuals who report illegal undertakings in the workplace—maintain the integrity of the U.S. financial system and safeguard the rights of employees, according to the symposium’s speakers. While responding ethically, whistleblowers risk the anger and contempt of their bosses and colleagues. As a result, the government has installed laws to protect them from retaliation, including job loss.
One legal measure has been taken by the U.S. Securities and Exchange Commission. Authorized by Congress, the SEC’s whistleblower program grants monetary awards to people who decide to speak up.
“I am proud that the whistleblower program continues to positively impact the SEC’s enforcement of the federal security’s laws,” said Jane Norberg, chief of the Office of the Whistleblower of the SEC. During her Keynote Address, Norberg discussed the intersection between the SEC’s whistleblower program and the agency’s efforts to stop fraud and wrongdoing. She also examined how whistleblowers help the agency return money to harmed investors, and she addressed the efforts to protect whistleblowers.
“The value that whistleblowers add to the SEC’s enforcement efforts and their ability to protect investors cannot be overstated,” she said.
The panel “Whistleblowers under Sarbanes-Oxley and Dodd-Frank” discussed and expanded on ideas that Norberg raised.
“I think at the end of the day, this is about whether or not employees are able to speak out, either to the employer or to the SEC,” said Jason Zuckerman, principal of Zuckerman Law. He represents whistleblowers—many of whom have been fired—in rewards and retaliation actions. Zuckerman addressed how the fear of reporting among employees is driven, in part, by unbalanced power dynamics within work environments.
“We really are talking about issues of culture, issues of the control environment,” said Alice BrightSky, senior director of Fordham Law’s Compliance Programs. She noted a significant number of employees who see misconduct do not report it. Of those who do report however, 80 percent first attempt reporting internally. So improving culture, BrightSky suggested, should increase internal reporting and also the rate of satisfactory resolution by the company.
Zuckerman and BrightSky were joined by Tracey McNeil ’99, ombudsman in the SEC’s Office of the Investor Advocate; Jennifer Pacella, assistant professor of law at the Zicklin School of Business of Baruch College; and Judith Weinstock, assistant regional director of legal operations for the New York Regional Office of the Securities and Exchange Commission. The panel was moderated by Ian Engoron, a third-year Fordham Law student and symposium editor for the Fordham Journal of Corporate & Financial Law.
Weinstock addressed the process of filing whistleblowing complaints. “You don’t actually need an attorney to file a whistleblower complaint to the SEC,” she said. Weinstock noted, however, that a person with an attorney can file a complaint anonymously.
McNeil, whose department hears and manages whistleblowing complaints, noted the importance of each and every report. “I don’t equate the value of what I do with the number of people,” she said. Her office has, however, successfully dealt with a relatively large number of cases.
The panelists agreed that the importance of whistleblowing comes down to a matter of ethics. They hope the government will continue to offer provisions in protection of whistleblowers, including in the Supreme Court hearing of Digital Realty Trust, Inc. v. Somers, which is scheduled for oral arguments on November 28.
“The underlying motivation behind a whistleblower is not necessarily financial incentive,” said Pacella. “It really is coming out of just a very loyal employee who’s extremely concerned about wrongdoing going on in the workplace.”