The term whistleblower refers to an individual who raises his/her concerns against the unethical or illegal activities of the organization. The employee may raise concerns either internally that is, within the organization or externally that is, any legal institution or organization (EthicalSystems.org). The misconduct of the firm that is brought under the spotlight may include activities such as; law violation, rule and regulation violation, threat to the organization’s stakeholders, fraud, health and safety violations, or corruption. As a result of bringing into notice, the unlawful activities of the organization whistleblowers often experience the reprisal from their fellow colleagues. In the case the claim of the whistleblower is not justified the law may reprise them. A whistleblower may be an individual who has a strong sense of ethics and a strong value and belief system. People are motivated to raise concerns because they believe that they would be protected against the consequences. In other words, where management and employees show support, in that environment, whistleblowers are likely to emerge. A person who is altruistically motivated may be seen as holding a strong characteristic found in whistle blowers. Furthermore, whistle blowers are often people who are well-adept professionally and intellectually. They are individuals whose behavior is guided by their attitudes and values.
Even though, whistleblowers may be behaving in an ethical manner by raising concerns about wrongdoings they may have to face serious consequences as a result of their actions. For instance; they are often forced to leave their organizations and if the organization is unable to do so because of legal constraints the employee may be demoted. The credibility of the whistleblower is also ruined within the organization as people would now be scared of him and would not consider him as trustworthy anymore. According to the Herzberg’s hierarchy of needs, the employee may experience isolation at the workplace because people would side line him and; thus, social needs would not be fulfilled which would eventually lead to de-motivation. On the other hand, whistle blowing has serious dire consequences for the organization. One of the major and most prominent consequences for an organization is the loss in revenue. Customers may change their loyalties if the organization is seen as unethical or illegal. Employees who do not share the same value system as the organization may seek employment elsewhere. In other words, the organization may lose out on talent; thus, become incompetent in the marketplace.
JP Morgan is a renowned name in the financial industry. This organization has offices all around the world, and they deal in millions of dollars worth of money. The main business of the firm is to provide consumers with financial products and provide financial assistance and consultation. However, regardless of being a giant in the financial industry they were reported as submitting thousands of mortgages for over a decade to the FHA, while these mortgages did not qualify for government guarantees. Keith Edwards, who raised the matter in the U.S district court of Manhattan, was to be paid $63.9 million in March 2014 as prize money for his ethical behavior. JP Morgan agreed to the misleading information they had been providing for over a decade and agreed that the problems were in their internal reporting systems (Stempel, 2014). Edwards was a former employee at JP Morgan and had sued the organization in 2013 on finding out the manipulation of numbers they were doing. Whistleblowers who submit their claims under the False Claims Act often gain financial benefit for making a justifiable complaint. As a result of being brought under the spotlight because of their unethical and illegal behavior, JP Morgan claims to enhance its quality control department to ensure future discrepancies are eliminated from their business (Chaudhri, 2014). In this case, Keith Edwards was justified in reporting the company’s actions because it is instances like this that lead to major financial crises such as those faced by the world in 2008. If JP Morgan continued to act on the same pattern, they would not only have an illegal edge over other financial institutions, but they would also be fooling the government agencies with whom they were conducting business.
The Sarbanes-Oxley Act provides protection to whistleblowers of public limited companies. It suggests that if employees who make a claim against their employer of the public company they would receive a certain percentage of the recovered amount. However, the US government under the Sarbanes-Oxley Act has provided numerous protections to the publicly traded organizations (WhistleBlower Law). According to the act, many activities are now under the legal roof; therefore, employees do not get the opportunity to raise concerns. Under President Obama’s regime, the framework of the Sarbanes-Oxley Act has been broadened. Edwards was protected under the Oxley Act because JP Morgan was misrepresenting figures in their dealings with governmental institutions. Edwards had a case in the favor of the government; thus, he was successful in justifying his claims.
References
Chaudhri, S. (n.d.). J.P. Morgan Whistleblower Gets $64 Million. Law Blog RSS. Retrieved October 17, 2014, from http://blogs.wsj.com/law/2014/03/07/j-p-morgan-whistleblower-gets-64-million-2/
Stempel, J. (2014, March 7). JPMorgan whistleblower gets $63.9 million in mortgage fraud deal. Reuters. Retrieved October 17, 2014, from http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower-idUSBREA261HM20140307
Supreme Court Says SOX Can Fit Almost Anyone. (n.d.). Whistleblower Law Blog. Retrieved October 17, 2014, from http://employmentlawgroupblog.com/supreme-court-says-sox-can-fit-almost-anyone/
Whistle Blowing | Ethical Systems. (n.d.). Whistle Blowing | Ethical Systems. Retrieved October 17, 2014, from http://ethicalsystems.org/content/whistle-blowing
