The Law To Know

War Room · Crisis room

The Whistleblower

An email to the compliance mailbox alleges fraud by a director, and the next fourteen days are yours to advise on.

It is Wednesday, 16:40. You are outside counsel at the firm that advises Corvane Engineering, a company of about 600 staff. Its general counsel, Petra Lund, forwards an email that arrived a few minutes ago in the compliance mailbox. It is from Ahmed Sayed, a junior finance analyst, who says that the finance director, Rolf Danner, has approved invoices of about 410,000 over eighteen months from a consultancy that, as far as Ahmed can tell, does not exist. Ahmed says he is frightened of what will happen to him. Rolf also sits on the board and is a friend of the chief executive. Petra reports to the chief executive. Whatever the company does in the next two weeks will be examined later.

Who is on the call

  • Petra Lund, General counsel (your client contact)
  • Ahmed Sayed, Junior finance analyst, the whistleblower
  • Rolf Danner, Finance director and board member, the accused
  • Gideon Marsh, Chief executive
  • Ines Corbin, Chair of the audit committee

The Marland Disclosure Protection Act (invented): what applies in this exercise

You do not need any outside knowledge. This is the rule you must apply, and it is printed beside every step.

  • A worker who reports suspected wrongdoing in good faith is protected from detriment: dismissal, demotion, exclusion, threats or less favourable treatment because of the report. Detriment is an offence, and the worker may be compensated.
  • The identity of the person who reported must be kept confidential, except where disclosure is necessary for a proper investigation or is required by law, and then only to those who need to know.
  • A company must have a safe channel for reports, acknowledge them promptly and see that they are looked into by someone who is independent of the person accused.
  • Where a company has reasonable grounds to suspect fraud of this kind, it must report it to the regulator within fourteen days.
  • A person accused is entitled to a fair process: to know the allegation in substance and to answer it before any decision is made.
  • The company must keep a record of the report, the steps taken and the decisions made.

What can be lost

  • The whistleblower's protection: Whether Ahmed is safe from detriment and his identity is kept confidential.
  • Integrity of the investigation: Whether the evidence is kept and the process is independent and fair.
  • The company's position: Whether the company looks like one that handled a serious report properly, in time.