Solid guidance for managing whistleblower policies in light of
the new Dodd-Frank Act provisions
In July 2010, President Obama signed the Dodd-Frank Wall Street
Reform and Consumer Protection Act that greatly expanded
whistleblower bounties in connection with violations of federal
securities laws, including the Foreign Corrupt Practices Act.
Discussing business protection strategies and best practices in
dealing with whistleblowers, Whistleblowers will appeal to board
members, executives, corporate compliance personnel, attorneys for
whistleblowers and defense attorneys, as well as potential employee
whistleblowers.
* Case studies of GlaxoSmithKline, Pfizer and other high profile
whistleblower incidences
* Examines new Dodd-Frank incentives to whistleblowers
* Recommends best practices for corporations in light of new
whistleblowing incentives
* Explores other federal and state statutory incentives to
whistleblowing
Timely and comprehensive, Whistleblowers emphasizes the
disincentives to whistleblowing, reviewing the academic studies of
whistleblowers with the idea of developing best practices in
working with whistleblowers.
Autorentext
FREDERICK D. LIPMAN is a partner with the international law firm of Blank Rome LLP and is also the president of the Association of Audit Committee Members, Inc. He has more than fifty years of experience in the areas of corporate governance, mergers and acquisitions, private equity, and IPOs. He has appeared on CNBC, CNN, Bloomberg, and Chinese television as a national commentator on business topics and has been quoted in the Wall Street Journal, the New York Times, USA Today, Forbes, and other business publications.
Zusammenfassung
Solid guidance for managing whistleblower policies in light of the new Dodd-Frank Act provisions
In July 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act that greatly expanded whistleblower bounties in connection with violations of federal securities laws, including the Foreign Corrupt Practices Act. Discussing business protection strategies and best practices in dealing with whistleblowers, Whistleblowers will appeal to board members, executives, corporate compliance personnel, attorneys for whistleblowers and defense attorneys, as well as potential employee whistleblowers.
- Case studies of GlaxoSmithKline, Pfizer and other high profile whistleblower incidences
- Examines new Dodd-Frank incentives to whistleblowers
- Recommends best practices for corporations in light of new whistleblowing incentives
- Explores other federal and state statutory incentives to whistleblowing
Timely and comprehensive, Whistleblowers emphasizes the disincentives to whistleblowing, reviewing the academic studies of whistleblowers with the idea of developing best practices in working with whistleblowers.
Inhalt
Foreword xiii
Acknowledgments xv
Introduction 1
PART I: THE WHISTLEBLOWERS AND THE DODD-FRANK INCENTIVES
Chapter 1: The Dramatic Expansion of Whistleblower Awards under Dodd-Frank 11
Whistleblower Provisions of Dodd-Frank 13
What Is Original Information? 14
What Are Violations of the Federal Securities Laws? 15
Rule 10b-5: Market Manipulation 19
Violating the Accounting Standards 20
False Financial Statements by Public Companies 20
Other Securities Laws 22
Protections for Whistleblowers 23
Commodity Exchange Act 23
Notes 25
Chapter 2: The Remarkable Story of Cheryl Eckard and the $96 Million Bounty under the False Claims Act 27
Who Is Cheryl Eckard? 27
Eckard's Post-termination Activities 28
Eckard's Superiors 29
Background Allegations 30
Alleged Violations 31
Timeline of Eckard's Alleged Activities 33
The Lessons of Glaxo 40
Notes 42
Chapter 3: The Pfi zer Whistleblowers Who Collected Over $100 Million under the False Claims Act 45
John Kopchinski 46
Bextra 47
The Complaint 48
Pfizer Lessons 51
Notes 53
PART II: DISINCENTIVES AND FACTORS MOTIVATING PUBLIC DISCLOSURE
Chapter 4: Disincentives to Internal Whistleblowers 57
Financial Disincentives 58
Nonfi nancial Disincentives 59
Contractual Commitments and Fiduciary Duties 60
Ethics Resource Center Survey 61
Reinstatement as a Remedy 62
Empirical Study 65
Notes 67
Chapter 5: Women as Whistleblowers: Factors Motivating Public Whistleblowing 69
Sherron Watkins 69
Cynthia Cooper 71
Coleen Rowley 71
External Reporting by Internal Whistleblowers 72
Whistleblower Anonymity 74
Notes 74
PART III: ORGANIZATIONAL BEST PRACTICES
Chapter 6: Why Should Organizations Adopt a Robust Whistleblower System? 79
Diminishment of Shareholder Wealth 80
Boards of Directors 81
We Were Duped! 82
Executive Whistleblowers 84
Why Independent Directors Cannot Rely Solely on Independent or Internal Auditors 86
Legal Standard 89
Caremark 90
Recommended Strategy 91
Criminal Liability of an Organization 92
Responsible Corporate Officer Doctrine 93
The Acme Markets Case 94
The U.S. Department of Justice Criminal Guidelines 96
The Disadvantages of a Robust Whistleblower System 97
Notes 98
Chapter 7: Establishing a Robust Whistleblower System 103
Problems with the Current Whistleblower System 104
Initial Steps 107
Elements of a Robust Whistleblower Policy 108
Independent Directors Must Be in Charge 109
The Whistleblower Program Must Be Independently Administered 111
Whistleblower Complaints Should be Investigated by Independent Counsel Reporting Directly to the Independent Directors 113
There Should Be No Presumption that Anonymous Complaints Are Less Deserving of Investigation 117
Motivations and Personality of the Whistleblower Are Not Relevant to the Truth of the Allegations 118
Absolute Protection of Whistleblowers' Identity Is Essential 119
Assess the Effectiveness of Hotlines and Provide Employee Compliance Training 123
Independent Counsel Should Report the Status and Results of the Investigation 124
Internal Whistleblowers Should Receive Meaningful Monetary Rewards 125
The Whistleblower Policy Must Be Communicated Effectively 127
There Should Be Milder Sanctions for Whistleblowers Involved in Illegal Group Activity 130
Retaliation Claims Should Be Independently Investigated 131
The Director of Corporate Compliance ...