Prosecutors uniformly agree that whistleblowers have played vital roles in the discovery of virtually every major corporate malfeasance of the twenty-first century. Without Sherron Watkins and Cynthia Cooper, we may never have learned of the fraud at Enron and WorldCom. Despite the pivotal role of whistleblowers, current law provides these public servants with insufficient legal protection. This creates a significant disincentive for employees to blow the whistle on future acts of corporate fraud. As we mark the fifth anniversary of the Sarbanes-Oxley Act and contemplate its future, we should take the opportunity to correct this oversight and compensate whistleblowers for their substantial personal and professional sacrifices.
Courts are currently split over whether Sarbanes-Oxley permits corporate whistleblowers to recover non-pecuniary damages such as reputation damages. This Paper applies the methods of statutory interpretation that Justices Breyer and Scalia favor to argue for interpreting Sarbanes-Oxley to permit whistleblowers to obtain all types of compensatory damages. Further, this paper argues that public policy demands that we permit whistleblowers to recover non-pecuniary damages because whistleblowers provide a unique and critical benefit to society at great cost to their personal lives and careers.
Nina H. Schichor is a third-year law student at the University of Maryland School of Law.