Dallas Attorney Counsels Managers on the Sarbanes-Oxley Act

What is the Sarbanes-Oxley Act?

Steve Kardell of Whistleblower Law for Managers at Clouse Dunn has prepared and counseled managers and corporate executives through whistleblower actions for more than 35 years. The Sarbanes-Oxley Act (SOX) is a federal statute administered by the Securities and Exchange Commission (SEC), which details corporate compliance requirements for publicly traded companies. The Sarbanes-Oxley Act was passed in 2002, following the dramatic collapse of Enron, WorldCom and other publicly traded companies. The basic goal of SOX is to establish new standards for all public companies, their governing boards, their management and public accounting firms.

The Sarbanes-Oxley Act requires public companies to develop and implement internal compliance programs to handle ethical issues. The Dodd-Frank Act has expanded protections and the reach of these SOX compliance programs. Companies that implement an acceptable program are typically granted amnesty or a reduced sentence if actual wrongdoing is later found to have occurred. Despite the admirable intentions of cleaning up corporate America, in many instances SOX has been perversely twisted into a vehicle to scapegoat the whistleblower.

The Sarbanes-Oxley Act is a corporate minefield

Consider the following situation:

You are the CFO at a public company. You become aware of systematic accounting irregularities. You use the confidential reporting system mandated by SOX, but suddenly start to hear rumors of your impending questioning at a compliance hearing and of your possible termination.

While many companies have implemented anonymous hotlines or tip lines, these reporting mechanisms often fall well below the anonymity they promise. To begin with, because the caller must provide details regarding an allegation of wrongdoing, it is not terribly difficult to deduce the identity of the caller. Once the identity of the caller is inferred, actions are taken against the caller, but the caller cannot state a case for retaliatory action because he or she is still assumed to be anonymous.

Similarly, reporting the wrongdoing to the press or regulatory agency also often results in negative outcomes for the whistleblower. Finally, doing nothing should never be the selected course of action.

If I can’t use the internal reporting mechanisms, then what should I do?

Rather than pursuing the courses of action stated above, a potential whistleblower should contact his or her own attorney. It is essential that the attorney not only be well-versed in whistleblower law but also in corporate internal investigations. An experienced attorney can anticipate the corporate internal investigative procedure and prepare the potential whistleblower to best state his or her grievance and potential remedial actions. This approach can not only salvage a career in jeopardy but also potentially enhance your professional standing by your presentation of remedial actions and being prepared to make a clean exit.

Contact our Dallas-Fort Worth attorney today to prepare and strategize your whistleblower action

At Whistleblower Law for Managers at Clouse Dunn, attorney Steve Kardell has developed and implemented whistleblower plans of action for business executives for more than 35 years. Despite numerous challenges in this area of law, Mr. Kardell has repeatedly been successful at securing monetary and other concessions. Please contact us today by phone 214-220-3888 or online to schedule a meeting at our central downtown office.