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Sep 13, 2013 by |

Whistleblower Provisions Are Often Ignored by Corporations


Many corporations have yet to realize that whistleblower retaliation is illegal.  Cases where whistleblowers have helped the government recoup money that was gotten as a result of fraud have been in the news recently.  However, some corporations have yet to understand their legal obligations with respect to whistleblower treatment.  Also, certain corporations have yet to realize that having a negative reaction to a whistleblower makes them appear guilty of whatever they were accused of.  Whistleblower and securities lawyers say that corporations need to adapt to the new regulations.

There have been two recent stories about whistleblowers in the news recently. In both cases, whistleblowers came forward to report fraud and put their jobs on the line by doing so.  In one case, the employee was fired and in another case, the employee was suspended and then resigned.

In one of those cases, a member of a local government financial staff who was a supervisor of financial services for more than 10 years, testified that she told several of her supervisors that revenue projections were overestimated on a financial statement required for a bond application.  She also reported inappropriate transfers of money, one of which went to the local government supervisor.  The employee was told to keep her mouth shut, then eventually terminated.  In this case, the local government made the situation worse by not attempting to investigate the wrong doing that she reported.  One official denied ever being informed about the potential fraud from the employee.  Then the local government filed perjury and other charges against the whistleblower.  Whistleblower and securities lawyers say that this reaction to a report of fraud by an employee is totally inappropriate.

In the second case, a former security expert who worked at a nuclear power plant believed that the plant was vulnerable to attack by terrorists.  He voiced his concerns to his supervisors and was suspended from his position.  The whistleblower filed a lawsuit alleging misconduct and retaliation against him.  The former employee alleged that security was not adequate and that internal reports were falsified.  Whistleblower and securities lawyers say that whistleblower retaliation is common despite being illegal.

In whistleblower cases the reaction of many corporations is to blame the employee, fire the employee and then go to court.  Whistleblower protections included in the Frank-Dodd Act, such as prohibitions against retaliation against employees are not always adhered to by corporations.  Fraud experts claim that it is up to each corporation to make sure that employees are comfortable stepping forward.  Corporations should have hotlines for employees to use to provide whistleblower tips.  Corporations often look guilty when they fire an employee for stepping forward with complaints, even if they did not commit the fraud.  Corporations would be better served to study the Frank-Dodd Act and come up with a plan for handling whistleblower complaints before they start receiving tips.

Evans Law Firm, Inc. handles whistleblower/false claims, consumer fraud class actions, insurance and banking fraud, consumer product liability, elder abuse, and personal injury cases.  If you think that you have witnessed or are the victim of financial fraud by an insurance company, bank or individual then, contact Evans Law Firm, Inc. at (415) 441-8669 for a free and confidential consultation, or email

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