The Wall Street Journal recently published an article analyzing the results of its federal Freedom of Information Act (FOIA) request concerning information received by the U.S. Securities & Exchange Commission whistle-blower program, which was expanded in 2011. It contains interesting information for whistle-blowers and corporate compliance and fraud specialists.
Particularly interesting is the delineation of whiste-blowers who filed reports—from retirees to an agronomist to two people who listed their occupation as “ex-wife,” along with a significant number of senior executives and board members. The number of reports filed by service industry personnel also suggest that discussing confidential information in bars, restaurants, hotels and taxis is a bad idea.
A key element of any anti-fraud program is a hotline for reporting of potential incidents, accompanied by strong senior management and board support of such a program, including strong protections against retaliation. The absence of such a program—or an ineffective program not driven by “tone at the top” or fair investigations—could drive whistle-blowers straight to the government, leaving companies without a chance to correct issues on their own.
Click here for more information about fraud hotlines.