There are certain times we may find ourselves coming across information that makes us question our employer’s motivations. Maybe you come across information that a manager or employer is engaging in illegal accounting practices, such as hiding losses or inflating earnings. Those who discover this information likely have questions on what to do next. The following will provide some information to help decide the best course of action.
The ethical dilemma and the decision to report
When an employee notices discrepancies in financial reports, such as unexplained adjustments or records that do not match actual transactions, they must decide how to best report the issue. Options can include a supervisor, a regulatory body, or through internal whistleblowing channels. It is important to review company policy to determine the right course of action.
The possible repercussions
Deciding to report unethical financial practices is brave, but it can lead to severe, and often illegal, repercussions from the employer. These could include acts of harassment, reduction in job duties, or even termination. It is crucial to know your rights BEFORE you oppose or otherwise report the misconduct so that your report is legally protected activity and instead acts as a deterrent to employer retaliation.
The possible rewards
A new Department of Justice Pilot Program rewards whistleblowers for filing complaint about financial fraud in certain circumstances with a percentage of any recovery. In addition, if the financial misconduct is within a public corporation, the SEC whistleblower program may be invoked and if it involves federal taxes, the IRS whistleblower program may apply.
You have rights
As noted above, such negative repercussions are not just unethical; they are often illegal. Laws provide protections for workers who come forward with this information, also known as whistleblowers. These laws safeguard whistleblowers against retaliation for reporting fraud. If retaliation occurs, your attorney will need to skilfully navigate the sometimes overlapping state and federal laws protecting whistle blowers.
The decision to report such activities should be informed by an understanding of both the ethical implications and the legal protections and potentially lucrative rewards available to whistleblowers. While the path of a whistleblower can be difficult, legal protections are in place to protect those who choose to come forward in the interest of transparency and accountability and potential may awards await those who stand up against wrongdoing.