Is your hotline working for you? The Securities and Exchange (SEC) Whistleblower line certainly appears to be working according to an article in the August issue of Compliance Week Magazine, entitled “Promoting Effective Us of the Compliance Hotline” by Columnist José Tabuena. In the article, Tabuena quotes SEC Deputy Director of Enforcement George Canellos, who related at a recent conference that “What’s really clear is quality of those tips has greatly improved and that market manipulation, dishonest accounting and potential violations of the Foreign Corrupt Practices Act (FCPA) are the most popular topics of whistleblower reports.”
In his article Tabuena gave an excellent example of the power of a hotline. He wrote about the case study of a company which had not integrated its IT function into its regular compliance and ethics training programs. As such there were zero calls into the hotline by employees from the IT department. This dynamic was changed and IT was integrated into the company’s regular compliance and ethics training. Thereafter, the hotline received several calls from IT department employees where there were two major areas of complaints. The first general area was that there were conflicts of interests between IT department managers, family members who were hired and perceptions of favoritism. The second generally revolved around allegations that certain company managers were manipulating data to maximize their bonuses.
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