Date of this Version
SOUTH CAROLINA LAW REVIEW 64 (2012), pp. 1-54.
Whistleblower advocates and academics greeted the enactment of the Sarbanes-Oxley Act's whistleblower provisions in 2002 with great acclaim. The Act appeared to provide the strongest encouragement and broadest protections then available for private-sector whistleblowers. It influenced whistleblower law by unleashing a decade of expansive legal protection and formal encouragement for whistleblowers, perhaps indicating societal acceptance of whistleblowers as part of a broader law enforcement strategy. Despite these successes, however, Sarbanes-Oxley's greatest lesson derives from its two most prominent failings. First, over the last decade, the Act did not sufficiently protect whistleblowers who suffered retaliation. Second, despite the massive increase in legal protection available to them, whistleblowers did not play a significant role in uncovering the financial crisis that led to the Great Recession at the end of the decade. These related failures indicate that although whistleblowers had stronger and more prevalent protection than ever before, they had less reason to believe such protection works. This Article examines the developments in whistleblower law during the last decade and concludes that Sarbanes-Oxley's most important lesson is that the usual approach to whistleblowing may not be sufficient. Encouragingly, this Article also evaluates recent developments in light of Sarbanes-Oxley's successes and failures to demonstrate that policymakers may have learned from the Sarbanes-Oxley experience. During the last two years, regulators and legislators have implemented new strategies that may encourage employees to blow the whistle more effectively.