SEC Whistleblower Rewards Provide a Powerful Incentive
The Globe and Mail
August, 4 2014
Jordan A. Thomas discusses what deters and motivates whistleblowers from coming forward
As with Mr. Ben-Artzi, whistleblowers often have to spend countless hours with regulators explaining their allegations, and sometimes hire their own accountants and lawyers to back up their claims. That dissuades people from coming forward. Who wants to risk their career and then spend time and money arguing their case for years against a powerful institution?
Mr. Ben-Artzi's New York lawyer and former SEC assistant director, Jordan Thomas, points to another deterrent; the "bystander effect." It's a psychological theory that basically says the higher the number of bystanders, the less likely it is that any one of them will step forward. It's hard for people to stick their neck out when they think something might be wrong – even more so when it looks like their boss or superiors are fine with it.
Mr. Thomas has also been urging other countries to adopt similar compensation for whistleblowers. "Whether we like it or not, money can motivate people to do the right thing and when it is coupled with robust employment protections and the ability to report anonymously it has the power to break the corruption cycle," he told British lawmakers.