Whistleblower Reporting Fraud Paper

1. The SEC is often called the “watchdog” of corporate America. How does it assist in preventing fraud?

The Securities and Exchange Commission has the mission of protecting investors by maintaining fair, orderly and efficient markets. The SEC does this in a number of ways, and firms need to pay attention to these ways in order to ensure SEC compliance. The SEC has enforcement authority over a number of areas related to the nation's capital markets, including insider trading, accounting fraud, and providing false information. The SEC's jurisdiction extends to all securities that are traded publicly. Privately-held companies do not need to register with the SEC (SEC.gov, 2012).

In every setting there should be a policy and procedures on whistle blowing. The whistle blowing Policy is put into place to provide protection against the person in the work place against victimisation or any form of punishment (physical or verbal) when concerns are genuine. If you suffer any victimisation or punishment due to whistleblowing you may be able to take your case to an Employment Tribunal. If you have any concerns about misconduct or malpractice that is occurring in your work setting you should report it to your manager/supervisor. All information given is confidential. The whistleblower is a person that discloses wrongdoing that threatens others, rather than a complaint about their own treatment.

One of the main defenses E&Y took during the early stages of the HealthSouth suit was the fact that the SEC had no well-defined rules with regards to audit-related practices. Another defense was the mere fact that E&Y never faced a criminal indictment for the HealthSouth fraud. This was mainly due to the statute of limitations placed on securities fraud. It sets it at the earlier of (a) 2 years after the discovery of the facts constituting the violation or (2) 5 years after such violation. Thus, the DOJ was unable to file criminal charges against the firm because the partner on the audit (G. Marcus Neas) was “unaware” of the fraud in 1993.

The Security and Exchange Commission is the organization who monitors fraudulent transactions and insider trading. Some experts in ethical behavior consider inside trading the most dramatic form of utilitarian ethics.

Also in section 301 of The SOX Act, internal reporting of potential financial misappropriation of funds via anonymous whistleblowers is mandated. SOX 301 requires that audit committees of issuers listed on U.S. exchanges “establish procedures” for (i) receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters; and (ii) confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.  SOX 301 was codified as

How strong is the case? It is not definitive given the information available but in reality the truth does not matter. Mounting a defense against the SEC makes little sense for Begelman. Being a civil case, criminal charges are not a consideration. The state is seeking a civil penalty and a repayment of the gains (Securities and Exchange Commission). If Begelman surrenders his profits and pays a penalty of $15K he is able to avoid any admission of wrongdoing (Gehrke-White). Thus, it is pragmatic and financially beneficial (avoid prolonged legal fees) for Begelman to settle and move on regardless of his actual guilt or innocence. The only winner in the case is the State. The SEC effectively extorts $30K from the defendant by

The SEC (Securities and Exchange Commission) has a great influence on the audit of Smackey Dog Foods, Inc., which is conducted by Keller CPAs.

Access the "Litigation" section of the SEC's website at www.sec.gov/litigation.shtml. Click on "Accounting and Auditing Enforcement Releases." Click on "AAER-3234" filed January 20, 2011. Read the release and the related SEC Complaint. Summarize the release and complaint in 2-3 pages (12-point, double spaced).

Since the 1960s, the public value of whistle blowing has been increasingly recognized. Whistle blowing statutes protect from discharge or discrimination an employee who has initiated an investigation of an employer’s activities or who has otherwise cooperated with a regulatory agency in carrying out an inquiry or the enforcement of regulations. Many states have enacted whistle blower statutes, but these statutes vary widely in coverage. Some statutes apply only to public employees, some apply to both public and private employees, and others apply to public contractors. Under the federal False Claims Act, any person with knowledge of false claims or fraud against the institution may bring a lawsuit in his or

The definition section of the Dodd-Frank Act defines a whistleblower as someone who “provides . . . information related to a violation of the securities law to the [Securities and Exchange]

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”

This research paper will explore the fraud at Tyco and focus primarily on accounting and auditing issues related to the fraud. One thing worth noting about this case is that fraudulent financial reporting was not at the core of the fraud, which was the case with majority other big frauds at the time, such as Enron and Waste Management. On the contrary, fraud consisted of misappropriation of assets, and fraudulent financial reporting came as a consequence of trying to hide misappropriation of assets and the use of corporate money for personal benefit.

2. What measures can and should be taken to make it easier for corporate employees to ‘‘blow the whistle’’ on a fraudulent scheme they uncovered within the firm?

Whistleblowers who alert the agency to potential corruption cases will also be provided with protection by it.