In: Accounting
Protecting whistle-blowers are important because it is a part of corruption prevention in both public and private sector. In public sector, protecting whistle-blowers can make it easier to detect passive bribery, misuse of public funds, waste and other form of corruption. In private sector, it help authorities to identify cases of active bribery in commercial transactions. So eventually Whistle-blowers protection safeguard the public interest and promote culture of public accountability.
Whistle-blower may face legal consequences. There is possibility of losing job, because they are protected by anti-retaliatory provisions but for that they have to take that case in court and win based on proof. Otherwise they'll lost their job. They may be blacklisted because companies with nothing to hide may be reluctant to hire them, which may be quite difficult to secure equal job in future.
In Sept.14, 2018 Whistle blowers has earned award of more than $1.5million. They are provided the SEC with vital information and ongoing assistance that proved important to the overall success of an enforcement action. But this award doesn't compensate the whistle-blower for the risk he/she took in exposing the company.
The False Claims Act and Dodd Frank Act are one of the strongest tool that government possesses for combating frauds. While government may bring suit to recover losses from fraud without cooperation from private citizens, FCA and DFA also authorises private citizens with non-public information relating to the fraud to bring suit on behalf of customers. But again there are some drawbacks like FCA and DFA can't save whistle-blower against retaliation. Retailing against whistle blowers is often illegal but it happens anyway and result is whistle-blower is no longer works at the company. Even FCA and DFA can't save whistle-blower against finances that come under fire. FCA and DFA law make them whole- and they might get a financial windfall .