The End of the Internal Compliance World as We Know It, or an Enhancement of the Effectiveness of Securities Law Enforcement? Bounty Hunting Under the Dodd-Frank Act’s Whistleblower Provisions

Blount, Justin; Markel, Spencer

doi:10.2139/ssrn.1925463

Cited by 7 publications

(5 citation statements)

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“…Participants also suggested intelligence activities, vigilante, whistleblower, and hotline discoveries. Blount andBusiness andEconomic Research ISSN 2162-4860 2019, Vol. 9, No.…”

Section: Resultsmentioning

confidence: 99%

In the Quest of Protecting Financial Investors

Aborbie

Anthony

Masocha

2019

BER

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Financial investors remain exposed to investment, financial, and accounting fraud as well as loss of profitability, despite the dictates of the SOX Act of 2002. The most challenging aspect of corporate management is the unexpected nature of an emerging, existing, or an inherent investment or financial risk. Guided by the evolution of fraud theory, this exploratory case study’s purpose was to identify and explore the financial management strategies that corporate financial managers need to adequately protect investors. Twenty participants from a population group of corporate auditors of Fortune 1000 corporations provided input for this study. Data from the interviews were analyzed through coding, reviewing, categorizing, and combining common statements. The research findings included themes of knowledge and types of risks; the impact of financial fraud and risks on investment; the impact of accounting, auditing, and financial reporting standards; as well as financial management training to minimize audit expectations. These themes formed the focus of exploring the financial management strategies that corporate financial managers need to adequately protect investors and investments.

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“…Participants also suggested intelligence activities, vigilante, whistleblower, and hotline discoveries. Blount andBusiness andEconomic Research ISSN 2162-4860 2019, Vol. 9, No.…”

Section: Resultsmentioning

confidence: 99%

In the Quest of Protecting Financial Investors

Aborbie

Anthony

Masocha

2019

BER

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“…A further concern is how reward programs may undermine compliance systems, as discussed by Blount and Markel (2012). There could be a risk where colleagues or clients who could stop a crime, instead stay silent and collect a reward once the crime has been committed.…”

Section: The Role Of Whistleblowersmentioning

confidence: 99%

Drivers of Corruption: A Brief Review

Søreide¹

2014

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Some rights reserved 1 2 3 4 17 16 15 14 World Bank Studies are published to communicate the results of the Bank's work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally edited texts. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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“…However, developments over the last decade suggest that these have not worked as well as intended. This is attributed in part to its statutory drafting flaws, which resulted in the lack of effective protection as well as sufficient incentives for whistleblowers (Blount and Markel, 2012).…”

Section: Sox's Deterrent Rolementioning

confidence: 99%

“…Where whistleblowing reported cases are concerned, the SEC's responses for various reasons have not been encouraging, but the creation of the Office of the Whistleblower (OWB) in the SEC following the DFA is expected to provide more positive results. This is further reinforced by the DFA's reemphasizing the importance of anti-retaliation policies and procedures to strengthen internal corporate reporting systems (Blount and Markel, 2012).…”

Section: Dodd-frank Whistleblowing Provisionsmentioning

confidence: 99%

Whistleblowing laws: Before and after Sarbanes–Oxley

Yeoh

2014

Int J Discl Gov

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has experience in financial services law and is a law lecturer and researcher at the University of Wolverhampton. He has published in this and other peer-reviewed corporate and financial services law journals. He has first degrees in management, economics and law, and postgraduate degrees in business management and law, including a PhD in corporate financial law.ABSTRACT The significant contributions of whistleblowers towards the recent unravelling of LIBOR, money laundering and related scandals in various global banks are reminiscent of similar outcomes in the earlier Enron and WorldCom debacles. Employees and employers in the private sector in particular, despite rhetorical assurances by the latter, have not necessarily shared common interests where whistleblowing is concerned. Lawmakers and regulators in the United States, because of this, have designed whistleblowing rules at the state and federal level to provide protection to whistleblowers. To some degree, Sarbanes-Oxley (SOX) and the False Claims Act (FCA) together probably contributed to an enforcement regime combining anti-retaliation protection and financial incentives, which produced some results. The Dodd-Frank whistleblowing initiative that followed, in addition to enhancing internal reporting systems, also institutionalized the Office of the Whistleblower (OWB). Despite the enhanced flow of quality tips from all the US member states and other overseas economies to the Securities Exchange Commission (SEC), the institution has not issued a commensurate significant number of awards. This appears to suggest that the enforcement results may not have improved as intended. The apparent paucity of enforcement relative to tips secured has been attributed to the lack of SEC priority and the hesitation of potential whistleblowers because of lingering doubts and fears and anxieties over award outcomes. The recent US Supreme Court decision that whistleblower protection afforded by SOX extends to employees of contractors of public companies may, however, induce more potential whistleblowers to come forward. On the basis of the empirical studies, the UK's Public Interest Disclosure Act 1998 (PIDA) is found to be grossly ineffective in promoting whistleblowing in the United Kingdom, as well as in affording adequate protection for workers principally because of various gaps and ambiguities located in the PIDA provisions. This article argues that because of the developments in the United States, it might be timely and appropriate for the SEC to consider a qui tam provision resembling that in the FCA, and to allow bounty payments for SEC nonmonetary sanctions as further reforms. As courts and tribunals in the United Kingdom begin to interpret the newly enacted provisions of PIDA, further reforms could be envisaged. One good example is the call by the UK Whistleblowing Commission to authorize the Secretary of State to

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The End of the Internal Compliance World as We Know It, or an Enhancement of the Effectiveness of Securities Law Enforcement? Bounty Hunting Under the Dodd-Frank Act’s Whistleblower Provisions

Cited by 7 publications

References 0 publications

In the Quest of Protecting Financial Investors

In the Quest of Protecting Financial Investors

Drivers of Corruption: A Brief Review

Whistleblowing laws: Before and after Sarbanes–Oxley

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