While, Theranos has appeared recently in the news and is definitely a sign that whistleblowers are needed and companies are still willing to bend the rules with complete disregard of the consequences, which are much larger than simply fines. The Worldcom whistleblower case is incredibly important because it is often viewed as one case that a whistleblower changed corporate America. The Worldcom case led to legislature changes and the creation of Sarbanes-Oxley Act and even the creation of many internal controls within corporate America's organizations. I think the Worldcom whistleblower was not only a positive for that business, which closing of a business can be a positive in the light of poor ethics, but the effects were a positive essentially for corporate America across the board.
Currently, a large problem exists with organizations flirting with the line of ethics as a result of strict focus on financial profits. Whiteblowing has a derogatory or negative connotation to
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As seen recently with Theranos to Edward Snowden. Edward Snowden is in a different country under aslyum and regardless of political views, there was no safety for him. With Theranos, Tyler Shultz has experienced up to $400K in legal fees for whistleblowing and separation with his grandfather. His parents were debating selling their home to cover the legal fees. These two situations prove that there is little to no protection for whisteblowers. Overall, there is nothing that would make more individuals feel safe exposing a company. This should be a huge concern, as preventing unethical behavior should be a huge priority. When companies are damaged by unethical behavior or even close, a lot of harm is caused that more than likely could have been prevented. Corporate America needs to decide if ethics and achieving profit can have synergy and be achieved, or if pleasing shareholders has created a conflict of interest with
The stakeholders in this fraudulent case of WorldCom consist of Bernie Ebbers, Scott Sullivan, Buford Yates, David Myers, Cynthia Cooper, and Betty Vinson belong to the company. While the other stakeholders would consist of the creditors, Andersen (accounting firm), investors, and the public. This fraudulent act committed within WorldCom impacted every single stakeholder in a way. Either in a negative or positive way, most of the impact was caused with harm to everyone. The main individuals such as Ebbers, Sullivan, and Vinson all had major consequences as resulting with the fraud. Criminal trials were a major result with their fraudulent acts within WorldCom. Cooper was a lifesaver by most of the community. Aside from these individuals, the rest also got affected by the fraud. Investments conducted by the investors were all lost within the fraud process. The impact towards much of the image for Andersen was ruined. Many of the public lost their trust on the honesty and professionalism of Andersen and other certified public accounting firms. The entire employees from the top management to the smaller group of workers stayed unemployed and some with criminal punishment.
In the novel and film “The Whistleblower” the authors and directors did great jobs making you really connect with characters and sympathize with more than one of them. It was a story that really made you feel an emotional rollercoaster, at least with me there was anger, sadness, frustration, confusion and more. At the same time as there were negative feelings there were the feelings of hope and cheering for certain characters. No matter what was going on I almost always felt some sort of compassion, sympathy, empathy and apprehension. The authors and directors did a good job of making you feel mainly sympathetic in the entire film/novel. Specifically I was constantly had the feeling of sympathy with the lead character Kathy
Whistle blowing in organizations can be an outstanding source of needed information to the organization. On the other side, that same information that is delivered can have a negative effect on the employee that has decided to take matters in to their own hands and inform management of potential unethical behavior. An article called “Nonprofit whistle-blower employee nets $1.6 million retaliation award” written by Tricia Gorman is in reference to an employee whistle-blower that her place of employment violated the New Jersey Conscientious Employee Protection Act, which is part of the organizations policy for hostile work environment.
Sarbanes- Oxley Act (SOX) was created following the discovery of unethical and fraudulent activates of companies likes Enron were made public and lead to a major crisis (Fraser & Simkins, 2010). The SOX Act is a code of conduct that public organizations must abide by an was form to ensure that corporations not only make ethically decisions for legal decisions and practices as well. Public organization must abide by the state and federal laws that SOX consists of and their attorneys must report any violations. Organization must create code of conduct policies and ensure employees abide by the policy. Whistleblowers are protected under the SOX Act and any employees that were terminated under unethically and illegally can be reinstated and paid
Taking the ethical stand can be risky. There is no guarantee that being ethical can increase profits. Nonprofit organizations for example operate in good faith, and not necessarily out there to make a profit. The ability of an organization to remain transparent is a must do if they are to remain in business. When organizations are not transparent, they could be under a cloud of suspicion and at risk, affecting their profit and damaging their good name. The whole world and non-governmental organizations will be looking for that transparency. Technology has become so widely available that positive or negative information will be known, almost immediately around the world.
Several theories indicate why the whistle-blowing process has become more prevalent and characteristics or processes encourage individuals to come forward a report instances of wrongdoing or making organizational behaviors public knowledge (Lennane, 2012). The process of whistle-blowing often involves an individual being conflicted between loyalty to their organization or their belief that they have a responsibility to protect public interest above the practices of their organization (Soma & Nirmala, 2011). Individuals may attempt to initiate
WorldCom was America 's second largest telecom company in 2000 (The WorldCom Accounting Scandal, 2002). Making a modest beginning in the hinterland of Mississippi in 1983 with a meager capital of less than 100,000 USD it reached the pinnacle of corporate success reporting more than USD 39 billion in revenue and USD 150 million in MCAP (The WorldCom Accounting Scandal, 2002). In the process it became 42nd in the Fortune 500 list. Under the leadership of CEO Bernie Ebbers it grew rapidly by means of acquisitions and increased demand for telecom services farther fuelled the growth of WorldCom during the whole of 90s. However on June 25, 2002, WorldCom announced that it had overstated earnings in 2001 and the first quarter of
While the argument “permissible always” was able to provide an explanation why we are to not feel loyal to corporations, it doesn’t mean that their argument is true. I shall now examine what I see as the best powerful against “permissible always”. While the argument appears above, there are more factors to be considered than just blowing the whistle. We need to weigh the gravity of the situation. If the matter being considered is of utmost danger to the company and could be
The Dodd-Frank Act has allowed for more leniency when it comes to whistleblowing but this legislation was implemented after this story began. There are several industry protection programs for whistleblowers and the Security and Exchange Commission (SEC) even promotes whistleblowing by giving out monetary rewards for certain cases. The Sarbanes-Oxley Act (SOX) was supposed to make whistleblowers believe that they would not be retaliated against. However, making the determination of whistleblowing after hearing Tony Menendez’s story will make the weak squeamish and the strong possibly reconsider.
Whistleblowing in the US has long been a controversial topic for many. Whistleblowers are people who work either as outsiders, like journalists, or insiders who uncover secrets from the inside of a corporation- who expose wrongdoings and secrets in the government or businesses. Being a whistleblower is risky business; reputations are put on the line and they commonly face legal trouble. While in the last century Congress has done more to protect these whistleblowers, many people are still on edge about the practice of whistleblowing and protecting it under laws. A big debate that has come to play is whether whistleblowers should be greater protected, or if they should be prosecuted by the law. Whistleblowing has in many instances been extremely helpful to US citizens, and here’s why it should be fully protected by the government.
On March 15, 2005 former CEO of WorldCom, Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. An internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. Later a second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings and understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees.
WorldCom was the ultimate success story among telecommunications companies. Bernard Ebbers took the reigns as CEO in 1985 and turned the company into a highly profitable one, at least on the outside. In 2002, Ebbers resigned, WorldCom admitted fraud and the company declared bankruptcy (Noe, Hollenbeck, Gerhart, &Wright 2007). The company was at the heart of one of the biggest accounting frauds seen in the United States. The demise of this telecommunications monster can be accredited to many factors including their aggressive-defensive organizational culture based on power and the bullying tactics that they employed. However, this fiasco could have been prevented if WorldCom had designed a system of checks and balances that would have
This editorial covers a challenging topic on whistleblowers. The article, “MassMutual whistle-blower finally identified,” written by Michelle Williams, discloses the information pertaining to a company by the name of Massachusetts Mutual Life Insurance Company and their whistle-blower that saved their proverbial tails in the long run. The U.S. Securities and Exchange Commission (SEC) delayed in identifying the Mutual Life Insurance Companies whistle-blower do the sensitivity of the information disclosed. This man, by the name of Bill Lloyd, was a loyal, straight laced individual who enjoyed his 22 year career as an agent. Lloyd knew of some compounding issues with their annuity programs, which guaranteed monetary benefits to their customers. This issue needed to be addressed, and it was on Lloyd’s conscience to bring this to the attention of the company and later to the SEC as a “final effort.” The SEC promptly addressed the matter to the Mutual Life Insurance Company and corrected the problem. Two years after reporting the issue to the SEC, the commission granted Lloyd monetary compensation for bringing the concern to their attention.
From the time of WorldCom’s inception there always seemed to be a tradition in management as if the company was only 100 or so employees. There was a “good old boys” mentality among the limited few running the company and if you were outside that circle then were told only what they wanted you to hear. An unspoken rule among employees was to do what you were told without questions or risk the consequences. One example of this situation occurred when senior management member Gene Morse told an employee “If you show those damn numbers to the f****ing auditors, I’ll throw you out the window” (Kaplan, R.S., & Kiron, D., 2007, p. 3).WorldCom showed no concern regarding an employee’s need and obligation to voice concerns on matters related
On December 8th, 1983 a telecommunication, media broadcasting, phone service provider known as WorldCom was planned. WorldCom has had many names throughout it production. For example, LDDS (Long-Distant-Discount-Service), and also now it's known as MCI. WorldCom is known for its accounting flaws and being a business who was a scandal business in the end. Due to the unthoughtful decisions WorldCom made they were responsible for many people losing their jobs, and many key employees were charged with different types of crimes related to fraud.