CCM CCM Ethics and Whistleblower Protections 4 — Questions and Answers
Question 1: Under the Dodd-Frank Act, what is the minimum percentage of monetary sanctions a whistleblower must qualify for to receive an award?
- 5%
- 10% (Correct answer)
- 15%
- 25%
Correct answer: 10%
Dodd-Frank provides whistleblowers 10%–30% of sanctions exceeding $1 million collected by the SEC.
Question 2: A compliance officer discovers a colleague has submitted falsified expense reports totaling $500. The colleague is a close friend. What is the ethically correct action?
- Warn the colleague privately and monitor behavior
- Ignore it as the amount is immaterial
- Report the misconduct through the proper internal channel (Correct answer)
- Confront the colleague and demand repayment before reporting
Correct answer: Report the misconduct through the proper internal channel
Materiality does not determine reporting obligations; all confirmed misconduct must be escalated through proper channels regardless of personal relationships.
Question 3: Which federal law specifically protects employees of publicly traded companies who report securities violations from retaliation?
- False Claims Act
- Sarbanes-Oxley Act Section 806 (Correct answer)
- National Labor Relations Act
- Occupational Safety and Health Act
Correct answer: Sarbanes-Oxley Act Section 806
SOX Section 806 prohibits retaliation against employees of publicly traded companies who report securities fraud to federal agencies or supervisors.
Question 4: An employee reports a compliance concern anonymously through the hotline, but management identifies the employee through investigative steps and terminates them. This most likely constitutes:
- A lawful termination if documented with performance reasons
- Protected whistleblower retaliation (Correct answer)
- A permissible HR action unrelated to the report
- A valid business decision outside compliance jurisdiction
Correct answer: Protected whistleblower retaliation
Terminating an employee because they made a protected disclosure, even if made anonymously, constitutes illegal retaliation under whistleblower statutes.
Question 5: In ethical decision-making frameworks, 'utilitarianism' guides a compliance professional to:
- Follow the rule that produces the most consistent outcomes
- Choose the action that produces the greatest good for the greatest number (Correct answer)
- Act based on duties and obligations regardless of consequences
- Apply virtue-based reasoning centered on character
Correct answer: Choose the action that produces the greatest good for the greatest number
Utilitarianism evaluates ethical choices based on outcomes that maximize overall benefit to the greatest number of people.
Question 6: The False Claims Act's qui tam provision allows:
- Government prosecutors to double damages in fraud cases
- Private individuals to sue on behalf of the government and share in recovered funds (Correct answer)
- Compliance officers to subpoena corporate records without a warrant
- Regulators to impose fines without judicial review
Correct answer: Private individuals to sue on behalf of the government and share in recovered funds
Qui tam allows private citizens (relators) to file suit on the government's behalf for fraud against federal programs and receive 15%–30% of recoveries.
Question 7: A compliance manager learns that a senior executive is conducting business with a vendor owned by the executive's spouse without disclosure. This situation is best described as:
- A permissible related-party transaction requiring no action
- A potential conflict of interest requiring disclosure and review (Correct answer)
- A criminal matter requiring immediate law enforcement referral
- An HR matter outside the scope of compliance
Correct answer: A potential conflict of interest requiring disclosure and review
Undisclosed transactions with entities related to senior personnel represent conflicts of interest that must be disclosed and reviewed under most ethics policies.
CCM CCM Ethics and Whistleblower Protections 4
Under the Dodd-Frank Act, what is the minimum percentage of monetary sanctions a whistleblower must qualify for to receive an award?