Where is That Whistle Blowing From?

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By Adam Turteltaub
adam.turteltaub@corporatecompliance.org

Reuters recently ran an article about a pair of unusual whistleblowers.  They didn’t work at the company they tipped off regulators to.  They didn’t do business with the company.  Their family members didn’t either.

The whistleblowers were a pair of analysts.  One looked at the financials of the company, Orthofix International, and thought the numbers didn’t add up.  He checked with a friend and professional colleague who took a look at the data and agreed.  They told the government and, long story made short, the company reached an $8.25 million settlement with the SEC.

The case is a good reminder that not every whistleblower will be found within the four walls of your organization.   With the amount of data publicly available and with a sharp mind, and sometimes with the help of a good algorithm, there are thousands, if not tens of thousands of people who can spot something wrong.

If these two whistleblowers receive a piece of the settlement, you can make a pretty safe bet that a lot of people will be putting your company’s numbers into algorithms of their own.

It has long been popular to ask the question, “How would this decision look on the front page of the New York Times?”  Now it’s time to also start asking, “How would this decision look to a person at home with some analytic skills?”

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3 COMMENTS

  1. Your thoughts are spot on, as always, Adam. The very term “whistleblower” suggests an outsider. The original whistleblower is the referee who, after all, is not on our team. The referee is a (usually!) neutral outsider who just responds to the “data” before him and blows the whistle when that “data” runs afoul of the game rules.

    Though not a classic whistleblower story, I love this report of a teenager who discovered a NASA error (http://www.businessinsider.com/teenager-major-error-iss-nasa-data-2017-3). His innocent closing quote speaks to the heart of what we actually WANT from would-be whistleblowers — help in identifying where we might be off the mark. “I’m not trying to prove NASA wrong; I’m not trying to say I’m better, because obviously I’m not – they’re NASA,” he said. “I want to work with them and learn from them.”

  2. In connection with retaliation, there is also a controversy about whom the whistleblower contacts. One federal court of appeals says the report needs to go to a governmental agency, while the other says just reporting it internally is sufficient to protect the whistleblower from retaliation.

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