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Whistleblowing and Sarbanes-Oxley Due Research Paper

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Updated: Dec 24th, 2019

Whistleblowing is a usual practice in publicly traded companies that is supported according to the Sarbanes-Oxley Act and that leads to revealing the facts about the organizations’ illegal activities and practices.

The recent case related to the issue of whistleblowing in publicly traded companies involves Keith Edwards as a whistleblower and JPMorgan Chase & Co.

In this case, Edwards pointed at the fact that during a long period of time, JPMorgan submitted mortgages for insurance that could not be qualified according to the government standards.

The Case of Whistleblowing in JPMorgan Chase & Co

A whistleblower is a person who reports the observed violation of norms and legal standards or any other misconduct associated with the organization’s activities. In this context, a whistleblower acts as a protector of the public’s interests and contributes to preventing the further illegal activities (Halbert & Ingulli, 2014, p. 54).

In 2014, it was revealed with the help of Keith Edwards’s whistleblowing activities that JPMorgan submitted a range of mortgage loans in spite of the fact that they could not be qualified according to the federal standards.

It was noted that JPMorgan was submitting and working with inappropriate loans during the period of 2002-2013.

Edwards worked for JPMorgan as an assistant vice president during the period of 2003-2008, and he chose to report the observed illegal activities because of having the responsibilities for supervising the insuring unit in JPMorgan.

As a result of the case discussion in the Southern District of New York in April of 2014, it was stated that Edwards should be paid $63.9 million for providing the important information about the publicly traded company’s illegal activities (Edwards v. JPMorgan Chase Bank, 2014).

The Rationale for the Whistleblower’s Activities

It is important to state that the whistleblower should be justified in relation to providing the information on the illegal activities of the organization serving the public needs. Edwards acted according to the government standards, and he not only reported the violations of norms but also sued under the federal False Claims Act.

Edwards’s job position meant responsibilities for activities within the insuring unit, and the violations of insurance documentation norms as well as submitting of inappropriate mortgage loans could directly affect Edwards’s work in addition to the impact on the government and public’s interests.

In this context, while choosing whistleblowing activities, Edwards acted to protect the interests of the government and public as well as his personal interests related to the job position.

The Sarbanes-Oxley Act

Although there are many situations when employees need to be protected under the Sarbanes-Oxley Act because their employers focus on retaliation against whistleblowers, the discussed case is an exception because JPMorgan admitted the fact of violating the standards, and the company did not discriminate Edwards because he chose to whistleblow as the former employee of JPMorgan.

In this context, a whistleblower’s actions cannot be protected under the Sarbanes-Oxley Act. Still, Edwards also reported the first cases of violating the norms by JPMorgan while working for the company, and during that period, he was protected according to the Sarbanes-Oxley Act because he reported on the actions potentially harmful for the public, government, and investors.

Conclusion

Whistleblowing is an activity that is usually protected with references to the Sarbanes-Oxley Act, when the reported illegal cases occur in publicly traded companies. The Act serves to protect employees from discrimination and termination in cases when the organization ignores the government’s standards.

References

Edwards v. JPMorgan Chase Bank, 13cv1629 JAH (U.S. District Court, Southern District of New York, 2014).

Halbert, T., & Ingulli, E. (2014). Law and ethics in the business environment. New York, NY: Cengage Learning.

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IvyPanda. (2019, December 24). Whistleblowing and Sarbanes-Oxley Due. Retrieved from https://ivypanda.com/essays/whistleblowing-and-sarbanes-oxley-due/

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"Whistleblowing and Sarbanes-Oxley Due." IvyPanda, 24 Dec. 2019, ivypanda.com/essays/whistleblowing-and-sarbanes-oxley-due/.

1. IvyPanda. "Whistleblowing and Sarbanes-Oxley Due." December 24, 2019. https://ivypanda.com/essays/whistleblowing-and-sarbanes-oxley-due/.


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IvyPanda. "Whistleblowing and Sarbanes-Oxley Due." December 24, 2019. https://ivypanda.com/essays/whistleblowing-and-sarbanes-oxley-due/.

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IvyPanda. 2019. "Whistleblowing and Sarbanes-Oxley Due." December 24, 2019. https://ivypanda.com/essays/whistleblowing-and-sarbanes-oxley-due/.

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IvyPanda. (2019) 'Whistleblowing and Sarbanes-Oxley Due'. 24 December.

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