Title of the assignment: Whistle blowing

Students name: xxxxxxxx

Professors name: yyyyyyyy

Course title: xxxxyyyy

Date: 26th April 2015

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Introduction
Whistle blowing is a legal term given to the activity under which disclosure of any mal practices

in any organization. A whistleblower can be defined as the one who takes up the initiative to alert

the organization, public or the responsible authority about any scandal, ill practice or evidence of

corruption about any individual or group of persons (Johnson, 2003). This paper aims at

illustrating a whistleblowing instance in publicly traded company, whistleblower characteristics

and protection given under Sarbanes Oxley act.

Whistleblower characteristics

This paper would discuss whistle blowing case in JP Morgan in which company was charged for

overstating the quality of mortgage to its investors; this case caused biggest settlement between

US government and the organization costing Dollar 13 billion. Alayne Fleischmann is the whistle

blower of the company who was paid $63.9 million. Different issues for which JP Morgan was

charged include submission of thousands of mortgage insurance that do not qualify for

government guarantees to Federal housing administration (McCoy, 2014).

Whistleblowing issue

According to whistle blowing case there were number of criminal mortgage frauds that lead to

financial crisis. According to whistle blower, when she reviewed loans she found that 40 percent

of income was overstated in loan statements. According to the whistle blower she took the

complaint firstly to the managing director, providing recommendations for not selling high risk

loans and low risk securities in the market. Whistleblower was justified in proving her position in

the claim made as she proved it using various reports, evidences and analysis. In the year 2008

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was removed from the company and from 2012 she was working with organization which was

investigating JP Morgan scenario (Smith, 2014).

Whistleblower analysis
Whistle blower was justified in presenting her report against companies action, she provided

documents, reports as proof of fraud committed; according to law whistle blower can get portion

from False Claims Act settlements. She also informed regarding banks transactions in sourced

mortgage-backed bonds, which took place before crisis. She also tried to blow whistle internally

by informing management but this went into vain. She also discuss several problems encountered

by her as whistleblower, she lost her job as securities lawyer (Stempel, 2014).

Sarbanes Oxley act

The Sarbanes-Oxley Act of 2002 provides extreme protection to whistle blower, it include legal

remedy, employment protection. According to this act publicly traded companies need to

establish internal independent audit committee; policy must be formed by stating procedure to

file internal whistle blowing complaint within the organization. It also aims at protecting the

identity of whistle blower to give freedom of expression and reduce uncertainty fear. Under this

act, a whistle blower can recover lost wages, benefits, reinstatement and special damage caused.

In this case also, whistle blower received compensatory losses.

Conclusion
Above analysis helped in understanding that whistle blowing is a ethical step taken to speak

against a wrong scenario but several complexities are associated with it. However, there is need

for making internally strong scenario, strict whistle blowing policies within organization to

protect whistleblower and foster such behavior in the society.

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Bibliography
Hartman, L. P., D. R., & Radin, T. J. (2009). Translating Corporate Culture around the World:A
cross-cultural analysis of whistleblowing as anexample of how to say and do the right
thing. notizie di POLITEIA, 255-272.

Johnson, R. A. (2003). Whistle-Blowing in Organizations. washington: Lynne Rienner

Publishers,.

Keenan, J. P. (2000). Blowing the Whistle on Less Serious Forms of Fraud: A Study of
Executives and Managers. Employee Responsibilities and Rights Journal, 12(4), 199-217.

McCoy, K. (2014, October 18). Ex-JPMorgan lawyer tells tale of wrongdoing. Retrieved April
25, 2015, from USA today :
http://www.usatoday.com/story/money/business/2014/11/08/alayne-fleischmann-
jpmorgan-whistleblower/18652819/

Smith, Y. (2014, November 8). Matt Taibbi and Alayne Fleischmann Discuss JP Morgan
Mortgage Fraud, Eric Holder CoverUp on Democracy Now. Retrieved April 25, 2015,
from nakedcapitalism.com: http://www.nakedcapitalism.com/2014/11/matt-taibbi-alayne-
fleischmann-discuss-jp-morgan-mortgage-fraud-eric-holder-coverup-democracy-
now.html

Stempel, J. (2014, March 7). JPMorgan whistleblower gets $63.9 million in mortgage fraud deal.
Retrieved April 25, 2015, from reuters.com:
http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower-
idUSBREA261HM20140307

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