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Archive for November, 2010
Why Blow the Whistle? Whistleblowers’ Personal Motivations for Doing the Right Thing
Tuesday, November 23rd, 2010
Some pundits are attempting to limit enthusiasm for the newly proposed SEC whistleblower rules by saying they will lead to corporate employees making unfounded claims in an attempt to get a financial reward. Kenney & McCafferty’s experience with whistleblowers is long, and the firm offers this, the first of a series of blog postings about the reasons why whistleblowers come forward. Despite the often large rewards given to whistleblowers who have been valuable in aiding the government, financial gain is certainly not the singular motivating factor. In a May 2010 article in the New England Journal of Medicine, co-authors Aaron S. Kesselheim, David M. Studdert, and Michelle M. Mello address this very issue. Through a process of interviews and sociological analysis, the researchers concluded that there were four “non-mutually-exclusive” reasons why whistleblowers decide to speak out against illegal and unethical acts: integrity, altruism or public safety, justice, and self-preservation.
1. Integrity: Whistleblowers often felt that they would not be able to live with themselves knowing that they had not spoken out against the unethical and/or illegal practices of their corporation.
2. Altruism: Whistleblowers saw their outcries as a way of protecting the public from potentially dangerous situations.
3. Justice: Many whistleblowers viewed their actions as forcing wrongdoers to face the law.
4. Self-preservation: Whistleblowers knew illegal actions were occurring and did not want to be unfairly punished for them.
Out of these four motivating factors, the study found that most whistleblowers acted out of a sense of integrity and personal accountability, though the other three motives were also prevalent. This study confirms what Kenney and McCafferty has known for a long time. Our attorneys gain admiration and knowledge of these outstanding individuals as we continue to support and represent people standing up for what is right.
Sources: “Whistle-Blowers’ Experiences in Fraud Litigation against Pharmaceutical Companies.” Aaron S. Kesselheim, M.D., J.D., M.P.H., David M. Studdert, LL.B., Sc.D., M.P.H., and Michelle M. Mello, J.D., Ph.D., M.Phil. New England Journal of Medicine 2010; 362:1832-1839 May 13, 2010.
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SEC New Whistleblower Rules Proposed and Made Available for Public Comment
Wednesday, November 3rd, 2010
November 3rd, 2010 the SEC held an open meeting in which it proposed a set of rules regarding their whistleblower program. SEC Chairman Mary Schapiro opened the meeting with a broad overview of the intended rules summarizing the intended rules as a set of regulations to simplify and create transparency in the whistleblower process. SEC Commissioner Luis A. Aguilar elaborated on the proposed rules and clarifications of the Dodd-Frank Act by posing the following three questions:
- Should we exclude any wrongdoer from being eligible to receive an award categorically or in particular circumstances?
- Should an individual’s level of culpability be considered as a factor in determining whether the person is eligible for an award?
- Are there other ways in which we should limit the payment of awards to culpable individuals?
These questions address the legality of lawyers, auditors, and compliance personnel. It also asks a question that Bradley Birkenfeld was forced to painfully answer in the IRS arena: can a whistleblower receive recovered rewards if he is complicit in the illegal actions at hand in the case?
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