Dodd-Frank Financial 'Reform' Act May Force Companies to Clean Up Their Act
By Dave Lindorff
Wall Street lobbyists may have successfully managed to emasculate most of the important parts of the financial reform bill just passed by Congress last month, but one part of that 2000-page act, which establishes as bounty for whistleblowers who expose corporate financial wrongdoing to the Securities and Exchange System, managed to slip through unscathed.
If this surprisingly strong measure is supported by strong enabling regulations at the SEC, which has until next April to draw them up and approve them, some legal experts, including at law firms that specialize in representing corporate clients, say it could have a profound effect on the behavior of American companies.
The language being used by some of these attorneys is actually pretty apocalyptic, and entertaining to read.
Here’s a comment by the corporate law firm of Seyfarth Shaw on the new whistleblower provision’s significance:
“Employers need to ensure that, where practicable, whistleblower claims are resolved internally, as employees now have a unique incentive (in the form of a bounty) to report perceived misconduct to third-parties, such as the SEC, even before an employer may adequately address their concerns.
“Thus, employers are compelled to implement sophisticated complaint hotlines and provide multiple avenues through which employees can report perceived misconduct without fear of retaliation. Likewise, employers, including both publicly traded companies and their private subsidiaries and affiliates, need to promulgate appropriate codes of ethics and anti-retaliation policies and train managers to be receptive and responsive to employee complaints. Further, on a broader scale, management should adopt leadership models that foster a culture of integrity and accountability throughout the organization. Management should do so with an eye towards encouraging employees to raise complaints internally rather than to third parties.”
The implication here, of course, is that the present situation is the opposite, which as almost anyone who has worked for a corporation will attest, is exactly correct. More often than not, the norm is that employers do routinely retaliate against employees who try to do the right thing and report corporate malfeasance, even internally, and lower-level managers are unresponsive and prone to retaliation. Furthermore, senior management at many companies does not provide any kind of model of integrity and accountability or encourage employees to raise complaints internally....
For the rest of this article by DAVE LINDORFF in ThisCantBeHappening!, the new independent, collectively-owned, journalist-run online newspaper, please go to: ThisCantBeHappening!