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Whistle-blowing has been rampant across private and publicly-traded companies. Whistle-blowing involves the divulging of unauthorized information to internal and or external persons. Specifically, whistle-blowers reveal the wrong-doings of an organization. The information is revealed to the public or to the authority. A whistle-blower discloses the misconduct of an organization if he perceives that the organization is violating the law, or is putting unsuspecting employees or customers, at risk. Whistle-blowing comes with its consequences that include termination of jobs, lawsuits due to violation of confidentiality clause and in worst cases; the whistle-blower is ostracized by the society. The Sarbanes-Oxley Act, however, protects whistle blowers
Any person can become a whistle-blower thus not easy to detect a person from the face-value. However, whistle-blowers manifest several common characteristics. First, whistle-blowers are utilitarianism. The utilitarian perspective of the whistle-blower means that he aims to engage in acts that benefit the majority, in the society rather that a chosen few. Whistle-blowers also allow personal attitudes and beliefs to guide them (Mayrell, 2012). Organizational culture and practice do not easily sway the whistle-blowers thus the decision to publicize wrong doings if they note them. Whistle-blowers are educated individuals with high and respected positions within the company. Their senior positions at organizations enable them to access confidential company information.
Whistle-Blowing at JP Morgan
In 2013, JP Morgan admitted that it submitted mortgages that did not qualify for government guarantees. The result was that the government incurred losses in terms of bad loans especially during their financial boom. The information became public when whistle-blower Keith Edwards disclosed that JP Morgan has been engaging in the unlawful exercise for more than ten years. Keith had worked for JP Morgan from 2003-2008, in which he held the position of an assistant vice-president in charge with the supervision of government insuring unit (Stempel, 2014). Keith Edwards provided the legal authority with adequate evidence that resulted to the submission of the allegation by JP Morgan. JP Morgan admitted that it failed to provide the government agencies with internal review that had indicated that the mortgages were risky. The revelation led to JP Morgan paying approximately $614 million to the government. In most cases, whistle-blowers are intimidated to silence. However, Keith Edwards was different as he opted to make the revelation under the false claims act. The Act allows individuals to sue contractors and suppliers who are engaging in acts of fraud.
The false claims act provides that whistle blowers be rewarded part of the money that the government recovers as a result of the whistle-blowing. Keith Edward was given a $63.9 million reward for his revelation. Keith Edwards was justified to make the revelation because JP Morgan would have continued to defraud the government, at the expense of the tax-payers. JP Morgan had been negating in the defrauding scheme for over ten years thus proof that they were aware of their actions yet they did not undertake any measures to correct the problem (Stempel, 2014). The Sarbanes-Oxley Act (2002) protects corporate whistle-blowers by defending them against unlawful discharge. Additionally, the act protects whistleblowers from retaliatory tendencies that a company may consider against a whistleblower. Whistle blowers who provide truthful information are protected, under the SOX Act, against retaliation acts from the accused body or organization (Mayrell, 2012).
The SOX Act protects whistle-blowers from discrimination and prejudice because of their decision to reveal the wrong-doing of an institution. Whereas some whistleblowers struggle to get on with their life after making a revelation, whistle-blowing using the right channels can benefit the whistle blower and protect the public. Keith Edwards saved the taxpayers from continued financing of JP mortgage scheme, and Keith Edwards received an award as provided under the false claim act.
Mayrell, R. C. (2012). Blowing the Whistle on Civil Rights. Texas Law Review, 91(2), 449-477.
Stempel, J. (2014). JP Morgan whistle blower gets $ 63.9 million in mortgage fraud deal. Reuters. Retrieved from http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower-idUSBREA261HM20140307
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