United Breaks Guitars: Lessons Learned for Companies and Whistleblowers

Thomas Fox

One of the ongoing debates in the compliance world has been over the Whistleblower Provision of Dodd-Frank and whether this provision will aid or diminish a company’s overall compliance program. One of the points in this debate is whether or not a whistleblower should be required to go through an internal hotline, or other reporting mechanism, before going to the Securities and Exchange Commission (SEC) and reporting alleged violations of the Foreign Corrupt Practices Act (FCPA) or other US Securities laws which may apply to the company in question.

Many compliance professionals argue that the entire purpose of an internal reporting structure will be destroyed if a whistleblower can report to the SEC, receive anti-discriminatory employment protections and a potential monetary bonus for any fines and penalties collected by the SEC. Whistleblower proponents point to examples of employees who reported violations or made complaints and were terminated or in other ways discriminated against in their continued employment with the company.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Thomas Fox

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