Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘corporate’

The SEC Whistleblower Program

Monday, July 10th, 2017

In 2011, a former executive at Monsanto, a large publicly traded company, raised concerns that the company was violating accounting rules and misstating its earnings. Despite being aware of these issues, Monsanto failed to remedy the accounting violations and continued to misstate earnings. Undeterred, the former executive reported his concerns to the U.S. Securities and Exchange Commission (SEC) through its new whistleblower program. Armed with this information, the SEC opened an investigation into Monsanto’s accounting practices and discovered that the company had indeed violated accounting rules and misstated company earnings for three years. Monsanto agreed to pay an $80 million penalty to settle the charges and the former executive received a $22 million award from the SEC.

Overview of the SEC Whistleblower Program  

The SEC Whistleblower Program was established to incentive whistleblowers, like the former Monsanto executive, to report violations of the federal securities laws to the SEC. Under the program, whistleblowers may be eligible for an award when they provide the SEC with original information that leads to successful enforcement actions with monetary sanctions totaling more than $1 million. A whistleblower may receive an award of between 10-30 percent of the monetary sanctions collected.

The SEC requests specific, timely, and credible information about any violation of the federal securities laws. The most common whistleblower tips relate to corporate disclosures and financials, offering fraud and market manipulation. Other notable areas of whistleblower tips relate to insider trading, trading and pricing schemes, foreign bribery, unregistered offerings, and EB-5 investment fraud.

Under the program, whistleblowers may submit tips anonymously to the SEC if represented by an attorney. Moreover, most whistleblowers, regardless of citizenship or position within a company, are eligible (or can become eligible) for an award under the program. This includes internal auditors, external auditors, officers, directors, and even individuals involved in the wrongdoing.

Since 2011, the SEC Whistleblower Program has received over 18,000 tips and has awarded more than $150 million to whistleblowers. Enforcement actions resulting from whistleblower tips have enabled the SEC to recover nearly $1 billion in financial remedies from wrongdoers, much of which has been returned to investors.

Free eBook on the SEC Whistleblower Program

The rules implementing the SEC Whistleblower Program are complex and there are many potential pitfalls for whistleblowers. Zuckerman Law has recently released a free eBook about the program that highlights important steps that whistleblowers should take to increase the likelihood of recovering and maximizing an SEC whistleblower award. The eBook covers the following topics:

Overview of the SEC Whistleblower Program

  • What is the SEC Whistleblower Program?
  • Can I submit an anonymous tip to the SEC Whistleblower Office?
  • What employment protections are available for SEC whistleblowers?
  • What violations qualify for an SEC whistleblower award?
  • What are the largest SEC whistleblower awards?

Whistleblowers Eligible for an Award

  • Who is an eligible SEC whistleblower?
  • Can I submit a claim if I had involvement in the fraud or misconduct?
  • Can I submit a tip if I agreed to a confidentiality provision in an employment/severance agreement?
  • Can compliance personnel, auditors, officers or directors qualify for an SEC whistleblower award?

Reporting to the SEC and Maximizing Award Percentage

  • When is the best time to report the fraud or misconduct to the SEC?
  • Do I have to report the violation to my company before reporting the violation to the SEC?
  • Can I submit an SEC Whistleblower claim if the SEC already has an open investigation into the matter?
  • How do I submit a tip to the SEC?
  • What type of evidence should I provide to the SEC?
  • What factors does the SEC consider when determining the amount of the award?

After Reporting to the SEC

  • What happens after I submit a tip to the SEC?
  • How long does it take to receive an SEC whistleblower award?

Click here to download your free copy of the eBook SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.

About the Author: Jason Zuckerman represents whistleblowers nationwide in whistleblower rewards and whistleblower retaliation claims.  Recently Matt Stock and Zuckerman issued an ebook titled SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.

Workers Want a Green Economy, Not a Dirty Environment

Monday, June 5th, 2017

To justify withdrawing from the Paris climate change accord, President Trump said during his press conference yesterday, “I was elected to represent the city of Pittsburgh, not Paris.” From terrible experience, Pittsburghers know about pollution.

Before Pittsburgh’s renaissance, the streetlights Downtown frequently glowed at noon to illuminate sidewalks through the darkness of smoke and soot belched from mills. White collar office workers changed grimy shirts midday. To the west 130 miles, the polluted Cuyahoga River in Cleveland burned – several times.

Pollution sickened and killed. It triggered asthma and aggravated emphysema. In Donora, just south of Pittsburgh, an air inversion in 1948 trapped smog in the Monongahela River valley.  Poisonous steel mill and zinc plant emissions mixed with fog and formed a yellow earth-bound cloud so dense that driving was impossible. Within days, 20 people were dead. Within a month, another 50 of the town’s 14,000 residents succumbed.

Some viewed pollution as a blessing, a harbinger of jobs. Air that tasted of sulfur signified paychecks. For most, though, pollution was a curse. It meant scrubbing the grime off stoops daily. It meant children wheezing and gasping for air. It meant early death.

The preventable deaths are why my union, the United Steelworkers (USW), has fought against pollution for decades, long before scientists conclusively linked it to global climate change. That connection made combatting pollution even more urgent. It crystalized our obligation to save the planet for posterity. Signing the Paris Climate Accord last year committed the United States to preserving what we all share, the water and the air, for our children and their children. Donald Trump’s withdrawal from that agreement moves the United States, and the world, back in time to rivers so toxic they burn and air so noxious it poisons. Trump’s retreat makes America deadly again.

Don’t get me wrong. The USW supports job creation. But the union believes clean air pays; clear water provides work. Engineers design smokestack scrubbers, skilled mechanics construct them and still other workers install them. Additional workers install insulation and solar panels. Untold thousands labor to make the steel and other parts for wind turbine blades, towers and nacelles, fabricate the structures and erect them. Withdrawing from the Paris Accord diminishes these jobs and dispatches the innovators and manufacturers of clean technologies overseas where countries that continue to participate in the climate change agreement will nurture and grow them.

Eleven years ago, the USW joined with the Sierra Club to form the BlueGreen Alliance because USW members believe Americans deserve both a clean environment and good jobs. The USW believes Americans must have both. Or, in the end, they will have neither.

The Alliance, which now includes more than a dozen unions and environmental groups, has collaborated with industry leaders to find solutions to climate change in ways that create high -quality jobs.

It’s an easy sell to many corporate leaders. Shortly after the election last fall, hundreds of companies and investors, including the likes of Nike and Starbucks, signed a letter asking Trump to abandon his campaign rhetoric about withdrawing from the Paris Accord.

In April, more than a dozen Fortune 500 companies, including giants Google, BP and Shell, also wrote Trump urging against reneging on nation’s climate commitment. They said that because the agreement requires action by all countries, it reduces the risk of competitive imbalances for U.S. companies that comply with environmental regulations.

More recently, Apple CEO Tim Cook told Trump that disavowing the accord would injure U.S. business, the economy and the environment. Tesla CEO Elon Musk told Trump that if he turned his back on the accord, Musk would resign from two White House advisory boards.

Secretary of State Rex W. Tillerson, the former CEO of ExxonMobil, also urged Trump to keep the United States’ commitments under the 195-nation pact, rather than joining Syria as an outlier. Syria and Nicaragua are the only non-signatory countries, but Nicaragua declined to sign because its leaders felt the accord was not strong enough.

The streetlights never switch on at noon in Pittsburgh anymore. The Cuyahoga River now supports fish that live only in clean water. Donora’s sole reminder of those dark days in October of 1948 is a Smog Museum.

But the United States remains the world’s second-largest greenhouse gas polluter. It has an obligation to lead the world in combating climate change. Great leaders don’t shirk responsibility.

This blog was originally published at OurFuture.org on June 2, 2017. Reprinted with permission. 

About the Author: Leo Gerard is president of the United Steelworkers.

The Great Escape, Lawsuit Edition

Thursday, October 29th, 2015

pop tortThis week, Sprint agreed to pay nearly $3 million in government fines after being caught by the Federal Trade Commission for cheating and deceiving people with low credit scores.  As the FTC’s Bureau of Consumer Protection explained, “Sprint failed to give many consumers required information about why they were placed in a more costly program, and when they did, the notice often came too late for consumers to choose another mobile carrier.…. Companies must follow the law when it comes to the way they use consumer credit reports and scores.”

Yes they must, and it’s wonderful to see the FTC on the job. But when consumers are cheated because of illegal corporate practices, neither government regulators nor law enforcers (like attorneys general) can usually do much to recover compensation for the victims. As we noted pretty recently in a post about the VW emissions scandal, class actions are the only realistic way to do that. But since the Supreme Court let them, corporations have been inserting clauses into contracts that ban class actions and force individuals to resolve disputes in corporate-controlled, secretive arbitration systems. Forced arbitration is bad enough. But without being able to join with others in a class action lawsuit, most claims simply disappear, allowing corporate wrongdoers to completely escape any legal accountability.

The Consumer Financial Protection Bureau has taken the bold step of moving towards a rule to ban such clauses in consumer financial “contracts.” We hope they hurry because the damage caused by these clauses grows every day.

Today, the Center for Justice & Democracy released a new, updated fact sheet listing nearly 50 important cases that were dismissed because of forced arbitration clauses and class-action bans. These tossed cases were brought by customers ripped-off by automobile dealers, banks, credit card companies, phone companies, payday lenders and for-profit colleges (to name a few). They involve employees suffering from discrimination and wage and hour abuse. And we know there are many more cases out there.

Notably, three cases were brought by customers defrauded by Sprint and, like the rest, were thrown out of court, leaving cheated customers with nothing.

This blog originally appeared at ThePopTort.com on October 22, 2015. Reprinted with permission.

Heaven, Hell And The U.S. Chamber: 13 Years Of Anti-Judicial Propaganda

Friday, September 18th, 2015

Arthur BryantThe U.S. Chamber of Commerce’s Institute for Legal Reform just released the latest version of the propaganda piece it started publishing in 2002. Entitled 2015 Lawsuit Climate Survey: Ranking the States, the report summarizes the answers of a “nationally representative sample of 1,203 in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters at companies with annual revenues over $100 million” who responded to what it calls a “survey.” The so-called “survey” does not, however, show what these people really think.

Everyone taking it knows that its purpose is – as it has been for the past 13 years – to give big business a basis to smear state court systems that aren’t pro-business enough as “judicial hellholes” and push all state courts to limit corporate liability for wrongdoing.

Even so, the answers provide some extraordinary information.

First, Corporate America’s representatives say that state courts are increasingly better for them. Consumer, worker, environmental, and civil rights advocates would agree. As the report says, in the 13 years since the so-called survey began, “there has been a general increase in the overall average score” given to state court systems by lawyers for big business – “and this trend continues with the 2015 survey.”

“From 2002-2006,” the report finds, “the overall score averaged approximately 52.9, whereas from 2007-2015, the score averaged approximately 59.6.” Chart 2 of the report gives the details and shows that the score given by big businesses’ lawyers to state court systems has gone up almost every year. In 2003, Corporate America’s lawyers gave the state courts a score of 50.7; in 2015, they gave them a score of 61.7.

Since this is supposed to be the views of one side in an adversarial system, wouldn’t a score close to 50 be ideal? The Chamber’s propaganda campaign (backed by corporate lobbying, campaign donations, and decisions like Citizens United) is plainly working. I understand that, in theory, a system perceived to be fair by all parties should get a score of 100 from everyone but, remember, this was a “survey” taken by specific people of specific people for a specific purpose: to push the state courts in the corporations’ favor. You could reasonably expect a court system that got a score of 100 from these participants to get a score of zero from lawyers trying to hold big businesses accountable for breaking the law.

Second, even in a “survey” designed and taken to show that the state courts are biased against big business, half of Corporate America’s lawyers say the state court liability systems overall are “excellent or pretty good.” Another 41% say the systems overall are “only fair.” I thought the goal was for them to all be “fair.” But perhaps that’s why I’m a public interest lawyer, not a lawyer for big business. Despite the reason for the “survey,” only 8% said the systems overall were “poor” (the last 1% was not sure or declined to answer).

In other words, despite what the “survey” is intended to show, it actually shows that the state court systems overall are viewed by Corporate America’s lawyers as significantly better for big businesses than they are for the people and companies suing them. Can you imagine the cries of bias we would hear if a survey showed legal services, consumer, and workers’ lawyers saying the courts were “excellent or pretty good” for them (much less “only fair”) in lawsuits against big business?

Third, Corporate America’s lawyers give grades between A and F to each of the state court systems and say where they do and don’t like to be sued. In a stunning and continuing display of arrogance, they actually include a map of the “Best to Worst Legal systems in America.” The map was apparently created in Bizarro World. They give As to 14% of the state courts, Bs to 38%, Cs to 27%, and Ds to 11%. In other words, even according to these “survey” respondents, 90% of the state court systems are passing. They give failing grades, Fs, to 5%. The other 5% were not sure or declined to answer. These answers, too, put the lie to Corporate America’s claims that state courts need to be more favorable to them. If anything, they show that many state courts are already far more favorable to big businesses than they are to those trying to hold big businesses accountable.

The “survey” respondents also took the time to tell us which states’ courts are the most, and least, favorable to Corporate America. The top five states, according to them, are Delaware (often called a subsidiary of DuPont), Vermont, Nebraska, Iowa, and New Hampshire. See any states in there with a lot of minorities and poor people who might not look kindly on big corporations abusing their power? The bottom five states, they say, are West Virginia, Louisiana, Illinois, California, and New Mexico. Ask yourself the same question. I question some of these rankings. Most plaintiffs’ lawyers would list the Texas state courts as one of the most pro-business in the nation. But maybe the state’s so big that they don’t want to admit that. The states they rank highest are all fairly small.

If you want to figure out which states have juries most likely to hold big corporations accountable, try reversing the order. These are the states the Chamber of Commerce regularly uses this “survey” to label “judicial hellholes.” In reality, however, a “hellhole” for corporations violating the law may be “heaven” for those seeking justice against businesses that cheat or injure consumers (for more on this, click here).

What we need in America are state and federal court systems that are fair – and biased in no one’s favor. Unfortunately, the Chamber of Commerce’s latest propaganda piece shows we are far from that goal and, for some time, things have been getting worse. Big businesses’ own lawyers say that state court systems have turned increasingly in Corporate America’s favor since the “survey” began.

This needs to stop. Our courts systems need to turn back to being even-handed. That’s the only way justice can be done.

This blog originally appeared on Public Justice on September 17, 2014. Reprinted with permission. 

About the Author: Arthur H. Bryant, Chairman of Public Justice, has won major victories and established new precedents in several areas of the law, including constitutional law, toxic torts, civil rights, consumer protection, and mass torts. The National Law Journal has twice named him one of the 100 Most Influential Attorneys in America.

Women Haven’t Gained A Larger Share Of Corporate Board Seats In Seven Years

Wednesday, December 12th, 2012

In addition to grappling with a persistent pay gap, working women also have to deal with extreme difficulty ascending to powerful corporate positions, according to a report by the research organization Catalyst. As Bryce Covert explained at The Nation:

Women held just over 14 percent of executive officer positions at Fortune 500 companies this year and 16.6 percent of board seats at the same. Adding insult to injury, an even smaller percent of those female executive officers are counted among the highest earners—less than 8 percent of the top earner positions were held by women. Meanwhile, a full quarter of these companies simply had no women executive officers at all and one-tenth had no women directors on their boards. […]

Did this year represent a step forward? Not even close. Women’s share of these positions went up by a mere half of a percentage point or less last year. Even worse, 2012 was the seventh consecutive year in which we haven’t seen any growth in board seats and the third year of stagnation in the C-suite.

Overall, more than one-third of companies have no women on their board of directors. But economic evidence shows that keeping women out of the board room is a mistake. According to work by the Credit Suisse Research Institute, “companies with at least one woman on the board would have outperformed in terms of share price performance, those with no women on the board over the course of the past six years.”

This post was originally posted on Think Progress on December 11, 2012. Reprinted with Permission.

About the Author:  Pat Garofalo is the Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Corporate Profits Hit Record High While Worker Wages Hit Record Low

Tuesday, December 4th, 2012

A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.

In the third quarter of this year, “corporate earnings were $1.75 trillion, up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):

 

Corporations made a record $824 billion in profits last year as well, while the stock market has had one of its best performances since 1900 while Obama has been in office.

Meanwhile, workers are getting the short end of the stick. As CNN Money explained, “a separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP, and had been as high as 49% as recently as early 2001.”

This post was originally posted on Think Progress on December 3, 2012. Reprinted with Permission.

About the Author: Pat Garofalo is the Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

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