NCJ Number
237014
Journal
American Criminal Law Review Volume: 48 Issue: 3 Dated: Summer 2011 Pages: 1457-1483
Date Published
2011
Length
27 pages
Annotation
This article examines the whistleblower protection amendments to the Sarbanes-Oxley Act of 2002, that were implemented as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Abstract
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 provides significant increases in offering protection for whisteblowers compared to other Federal whistleblower statutes. These increases come in the form of amendments to the whistleblower protections provided under Section 806 of the Sarbanes-Oxley Act of 2002. While many view these amendments as a positive step in improving protections for whistleblowers, the author of this article argues that the amendments will instead have the opposite effect, and be more detrimental rather than beneficial to employee whistleblowers. The article begins with an overview of the history and accounting scandals, primarily Enron and WorldCom, Inc., that led to the formation of the whistleblower provisions in Sarbanes-Oxley. This is followed by an examination of the financial crisis of 2007-2009 that led to the development of whistleblower protections under the Dodd-Frank bill, and how these provisions amend those found under Section 806 of Sarbanes-Oxley. The third section of the article discusses the litigation that has arisen from cases brought under the provisions in Section 806 that were amended by Dodd-Frank. The final section then presents an analysis of how Dodd-Frank's amendments to the original whistleblower protections in Sarbanes-Oxley may actually harm the shareholders that Sarbanes-Oxley was designed to protect, may weaken rather than strengthen an employee's chances at finding a favorable outcome as a result of their actions, and may not in the end substantially alter the outcome of Section 806 cases.