RCMS RCMS Whistleblower Programs & Reporting Obligations 1 — Questions and Answers
Question 1: Which federal law first established broad whistleblower protections for employees who report corporate fraud at publicly traded companies?
- Sarbanes-Oxley Act (SOX) (Correct answer)
- False Claims Act
- Dodd-Frank Act
- National Labor Relations Act
Correct answer: Sarbanes-Oxley Act (SOX)
SOX Section 806 established the first broad federal anti-retaliation protections for employees of public companies who report securities fraud.
Question 2: Under the False Claims Act's qui tam provisions, a private individual (relator) who brings a lawsuit on behalf of the U.S. government may receive what share of recovered funds?
- 15 to 30 percent (Correct answer)
- 1 to 5 percent
- 50 to 60 percent
- 5 to 10 percent
Correct answer: 15 to 30 percent
Qui tam relators under the False Claims Act are entitled to 15–30% of recovered funds depending on whether the government intervenes in the case.
Question 3: A compliance officer is designing a whistleblower program. Which feature is most critical to encourage reporting?
- Anonymity and anti-retaliation protections (Correct answer)
- Financial rewards for all reports
- Mandatory reporting to government agencies
- Public disclosure of all complaints
Correct answer: Anonymity and anti-retaliation protections
Anonymity and strong anti-retaliation protections are the most critical features because fear of retaliation is the top barrier to reporting misconduct.
Question 4: Which agency administers the whistleblower program under the Commodity Exchange Act (CEA)?
- Commodity Futures Trading Commission (CFTC) (Correct answer)
- Securities and Exchange Commission (SEC)
- Financial Industry Regulatory Authority (FINRA)
- Department of Justice (DOJ)
Correct answer: Commodity Futures Trading Commission (CFTC)
The CFTC administers its own whistleblower program under the CEA, offering awards and anti-retaliation protections similar to the SEC's Dodd-Frank program.
Question 5: What is the primary legal protection afforded to internal whistleblowers under SOX Section 806?
- Protection from termination, demotion, or harassment for reporting suspected fraud (Correct answer)
- Guaranteed anonymity in all internal investigations
- The right to file directly with the SEC without exhausting internal remedies
- Mandatory financial awards from the company
Correct answer: Protection from termination, demotion, or harassment for reporting suspected fraud
SOX Section 806 protects employees of publicly traded companies from retaliation including firing, demotion, suspension, and harassment for reporting fraud.
Question 6: Which of the following best describes an 'open door' reporting policy in a compliance program?
- Employees may report concerns to any level of management without fear of reprisal (Correct answer)
- Reports must be submitted only to direct supervisors
- All reports must be made in writing and signed
- Concerns are escalated exclusively to external auditors
Correct answer: Employees may report concerns to any level of management without fear of reprisal
An open door policy allows employees to bypass normal reporting chains to raise compliance concerns with any manager or compliance officer without retaliation.
RCMS RCMS Whistleblower Programs & Reporting Obligations 1
Which federal law first established broad whistleblower protections for employees who report corporate fraud at publicly traded companies?