Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley
Shirmere N. Gardner
Dr. Susan Gerber
LEG 500: Law, Ethics & Corporate Governance
January 25, 2015
This text will examine the key characteristics of a whistleblower, as well as the details surrounding the JPMorgan whistleblowing event. The extent to which whistleblowers are protected under the Sarbanes-Oxley Act (SOX) will also be elaborated.
Key Characteristics of a Whistleblower
Whistleblowers are individuals who choose to report unethical and illegal activities. Some may work for various organizations such as non-profits and government agencies. Whistleblowing empowers employees ...view middle of the document...
In addition, JPMorgan admitted that it had failed to tell the agencies that its own internal reviews had turned up problems. The government ultimately has to cover millions of dollars of losses after some of the bank loans went sour, which resulted in evictions and foreclosures nationwide. Approximately, “$56.5 million of Edwards’ reward concerns the FHA portion of the case, and $7.4 million concerns the VA portion” (Stempel, 2014). There were no personal effects to Edwards as a result of his actions because he was no longer employed with JPMorgan at the time he filed the incident.
Edwards was justified in his actions in that not only did he file the incident, but he was also supported by the U.S. Department of Justice. Whistleblowers can recover portions of False Claims Act settlements, which often grow when government agencies become involved. In blowing the whistle, he was awarded $63.9 million. In my opinion, having the U.S. Department of Justice involved aided in the reward and also helped to solidify his claim.
Protection under the Sarbanes-Oxley Act (SOX)
The Sarbanes-Oxley Act protect employees from retaliation as a result of whistleblowing. According to OSHA, an employer covered under SOX may not discharge or in any manner retaliate against employees because he or she filed, caused to be filed, participated in or assisted in a proceeding relating to alleged unethical behavior. An employer has violated SOX if the employee’s protected activity was a...