Harry Markopolos, an independent financial fraud investigator who spend nearly a decade attempting to blow the whistle on Bernard Madoff's Ponzi scheme, finally got his day with the SEC. So what do you know about whistleblowing? Here's some trivia:
- A whistleblower is most often a past or present employee of a company or organization who reports misconduct that is typically a violation of law, regulation, or a threat to public interest, such as in the case of fraud.
- According to the ASAE & The Center for Association Leadership, more than 1,000 potential whistleblowers send e-mails to the SEC each day.
- Whistleblowing goes back more than a century. According to the CPA Journal, the act initially arose in connection with the government's False Claims Act, which was established in 1863 to offer incentives to individuals who reported companies or individuals defrauding the government. It was originally introduced to target sales of gunpowder to the Union during the Civil War.
- Even high-profile whistleblowing isn't always heeded. This research from Santa Clara University's Markkula Center for Applied Ethics points out that in 1972, Firestone's Tire Director of Development sent top management a memo warning that the 500 tire was subject to belt-edge separation at high speeds. The warning was ignored, and the model remained on the market.
- An eight-year study by a Virginia Tech sociology professor, which involved interviews with 300 whistleblowers and more than 200 silent observers (people who observed wrongdoing but chose to remain silent), found that 69 percent of the whistleblowers were fired as a result of exposing wrongdoing.