Only a tiny fraction of whistleblower claims against companies have been successful since the passage of the Sarbanes-Oxley law five years ago, raising questions about the ability of employees to raise the alarm about corporate malfeasance, a study claims.
While corporate America whines almost daily about “burdens” placed by it by the so-called “Sorbox” legislation, the truth is that companies continue to defraud investors almost with impunity, while abusing any employee who might dare point a finger at them.
Sarbanes-Oxley contained new pro-whistleblower provisions when it was passed in 2002 in the wake of the Enron and WorldCom scandals. Touted by some as a “revolution in corporate freedom of speech”, it was intended to strengthen the protections available to employees who bring to light cases of fraud by including strong “anti-retaliation” provisions.
Yet, a study by the University of Nebraska College of Law of 700 cases brought in the three years after Sarbox confirmed that only 3.6 per cent of cases were found in favor of employees and only 6.5 per cent were successful on appeal. Richard Moberly, author of the study, stated: “It’s an incredibly low win-rate that ought to be cause for concern.”
Employees rarely won claims. A major problem is that Government agencies, such as the Department of Labor, that adjudicate such cases interpret the whistleblowing provisions in the law as narrowly as possible. Most cases did not qualify to be heard, he said. (Strange that a governmental administration charged with enforcing a law would work so hard to gut its effect – unless you remenber who is in charge of this administration.)
Moral: Whether shareholder or employee, the rights of the rest of us hardly exist in a government dedicated to protecting corporate criminals. Welcome to the “New America”: Home of rich and powerful crooks who own its government.
Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have represented investors in more than 1,000 securities cases. To learn whether we are able to assist you with a claim contact us to arrange a free consultation with one of our attorneys.
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