Sarbanes-Oxley Section 301 requires public companies set up a hotline system for whistleblowers to internally report potential securities violations to the company’s audit committee. SOX 301 does not mandate a “one size fits all” approach, so companies can use different methods to help their employees internally report ethics violations that may impact financials or accountability. But Ernst & Young (EY), one of the premier SOX auditing firms, recommends that companies do the following:
- Set up an anonymous hotline and inform employees of it: the hotline does not need to be a literal phone line, but could instead be an online web submission form or dedicated email address, according to EY. Companies need to inform their employees of the existence of the hotline. And companies may want to consider using a third party vendor to collect hotline tips to ensure the anonymity of whistleblowers, says EY.
- Analyze and investigate claims: the company cannot simply ignore whistleblower tips submitted to its SOX hotline. The company must analyze and investigate the claims submitted to it to determine if the whistleblower is telling the truth, and if so, do the whistleblower’s facts have a material impact on the company’s financials, requiring the company issue a corrective disclosure to investors. Unfortunately, companies sometimes ignore SOX whistleblower tips, which is why SEC whistleblowers after seek out their own attorney after trying and failing to report internally.
- Reporting and resolution: once the company has screened whistleblower hotline tips for the most meritorious ones, EY says that those tips should be submitted to the full audit committee or board of directors for review. EY also says that the audit committee should track trends in hotline reporting. If there is a spike in the number of reports about a particular issue, then the audit committee know what issues to prioritize.
Our SOX whistleblower hotline is always open
Call (800) 709-4478 to get in touch with one of our SOX whistleblower attorneys, or fill out the form.
List of Corporate Whistleblower Hotlines
Below is whistleblower hotline information for the Fortune 10 companies:
Information on contacting the Business Conduct Helpline—including via email, toll-free telephone, and web access—is available on the Business Conduct website: http://businessconduct.apple.com/en/helpline/.
GM says its hotline, Awareline, is available on an internal website: https://gmweb.gm.com/HR/Security/Pages/.
Gibbs Law Group is a California-based law firm committed to protecting the rights of clients nationwide who have been harmed by corporate misconduct. We represent individuals, whistleblowers, employees, and small businesses across the U.S. against the world’s largest corporations. Our award-winning lawyers have achieved landmark recoveries and over a billion dollars for our clients in high-stakes class action and individual cases involving consumer protection, data breach, digital privacy, and federal and California employment lawsuits. Our attorneys have received numerous honors for their work, including “Top Plaintiff Lawyers in California,” “Top Class Action Attorneys Under 40,” “Consumer Protection MVP,” “Best Lawyers in America,” and “Top Cybersecurity/ Privacy Attorneys Under 40.”
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