1. Running head: WHISTLEBLOWING AND SARBANES-OXLEY
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Whistleblowing and Sarbanes-Oxley
William M. Parker II
Professor Geronda Carter, J.D.
Legal 500 Law, Ethics & Corp. Governance
1/21/2016

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Describe the key characteristics of a whistleblower, and briefly summarize one (1)
researched instance of whistleblowing in one (1) publicly traded company within the last 12
months. Include the details of the issue that the whistleblower reported and the effect of
the whistleblower’s actions on both the whistleblower himself and the company.
Whistleblower
The characteristic of a whistleblower is someone who witnesses unethical behavior at
work. A whistleblower can work for a private company, nonprofit organization or the
government (Hill, Ingulli, & Frey, 2015). They often are caught between the loyalties of their
organization and their own self-conscious. Next they will report the unethical activities to their
supervisors, regulators or the media (Hill, Ingulli, & Frey, 2015). As a result of them
whistleblowing, they can cause damaging repercussions to themselves and their families.
Publicly Traded Company
All publicly traded companies are highly regulated and must get approval from their
shareholders for operations, financial performance, and management decisions. The New York
Stock Exchange or NASDAQ is where their stock is traded. Being on the stock exchange is a
quick way for a company to raise large amounts of capital from investors (“Public,” 2015).
American investors build savings; investment and retirement plans from gains earned in stock
the market.
Whistleblowing
In early 2014, transport campaigners Peter Mock and John German began testing car
emissions to prove to Europe that the US could make clean diesel. They collaborated with West
Virginia University and drove their cars 1300 miles from San Diego to Seattle. Their goal was to

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drive on the road rather than in the lab to show that emission-busting technology didn’t affect
performance. When the results came back, the Volkswagens were pumping out dangerous levels
of toxins 35 times higher than the legal limit (“Volkswagen Scandal,” 2015). Both Mock and
German coincidentally discovered one of the biggest automobile scandals in years. They found
out Volkswagen was systematically rigging emissions tests by using illegal software called
‘defeat’ (“Volkswagen Emissions,” 2015). The pair then contacted the California Air Resource
Board and the US Environment Protection Agency, and the investigations began.
Decide whether or not the whistleblower was justified in reporting the company’s actions.
As a result, of their whistleblowing, Peter Mock, and John German have been coined as
heroes. They have appeared on TV, news channels, and radio shows to share their story. Their
lives will never be the same now that they are unlikely media stars who were initially automotive
engineers that were thrust into the global spotlight (“Meet,” 2015).
Mock and German have forced Volkswagen to admit they installed ‘defeat’ devices in 11 million
cars, the CEO and former chairman of the board of directors of Volkswagen AG Martin
Winkterkorn has resigned, and the company’s market value has lost $26.8 billion dollars
(“Meet,” 2015). Volkswagen has lost its consumer’s trust in their brand, cars, and technology.
Before the emissions scandal, they were the world’s largest automaker. They led in market
capitalization of $126 billion dollars, annual sales of $269 billion dollars, and employed 593,000
employees (“How,” 2015). Now the US, Germany, European Commission, and Korean officials
have decided to open up investigations into Volkswagen’s illegal emissions activity.
Mock and German forced the automotive industry to acknowledge the need for a balance
between engine performance and pollution control (“Volkswagen Emissions,” 2015). The auto
industry must take emissions testing seriously, or accept the consequences of putting the public’s

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health at risk. Over time, these risks could also cause catastrophic and irreversible effects on the
planet such as rising sea levels, polar melting, droughts, floods and extreme weather conditions
(“Record,” 2014). Besides protecting the environment, Mock and German were advocates for
consumers by forcing Volkswagen to recall 11 million cars. Volkswagen then had to repair their
cars and image in the eyes of their customers and dealership partners (“How,” 2015). The efforts
of the whistleblowers have opened up questions about whether other car manufacturers are
following all of their required emissions regulations.
Examine the extent to which the whistleblower would be protected under the Sarbanes-
Oxley Act.
The Sarbanes-Oxley-Act is a law created to prevent corporate fraud. It prohibits public
companies from discriminating against any employee who lawfully assists in providing
information in the investigation of conduct that the employee reasonably believes constitutes a
violation of federal securities laws (Hill, Ingulli, & Frey, 2015). In the case of the Volkswagen
scandal, it addressed cars, emissions, and air pollution. The Sarbanes-Oxley Act would not
apply to Peter Mock and John German as whistleblowers. The statute only protects employees
of the corporation that feel they are being retaliated against by their employer after they perceive
a violation of federal securities laws (“Whistleblower,” 2007). Because of this German and
Mock are safe.
John German and Peter Mock’s case of whistleblowing is unique because they were not
employees of a Fortune 500 company. They are simply researchers working at a 12 million
dollar a year nonprofit and at a land grant university with a budget of 4 million dollars a year
(“How,” 2015). Their story is incredible because they were able to stop the world’s largest
automaker from defrauding their customers and ultimately polluting the environment.

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References
Halbert, T., Ingulli, E., & Frey, M.A. (2015). Law and ethics in the business environment
with readings from essentials of contract law. Mason, OH: Cengage Learning.
How Two Dogged Clean Air Sleuths Exposed Massive VW Deceit (2015). Environmental
Working Group. Retrieved from http://www.ewg.org/enviroblog/2015/09/how-two-
dogged-clear-air-sleuths-exposed-massive-vw-deceit
Meet John German: the man who helped expose Volkswagen’s emissions scandal. (2015).
Guardian News and Media Limited. Retrieved from
http://www.theguardian.com/business/2015/sep/26/volkswagen-scandal-emissions-tests-
john-german-research
Public Companies Trying to Mimic Private Firms. (2015). The New York Times Company.
Retrieved from http://www.nytimes.com/2015/11/05/business/dealbook/public-
companies-trying-to-mimic-private-firms.html?_r=0
Record CO2 Emissions Committing World to Dangerous Climate Change. (2014). Guardian
News and Media Limited. Retrieved from
http://www.theguardian.com/environment/2014/sep/21/record-co2-emissions-
committing-world-to-dangerous-climate-change
Volkswagen Emissions Scandal: Is My Car Affected?. (2015). Telegraph Media Group Limited.
Retrieved from http://www.telegraph.co.uk/news/uknews/road-and-rail-
transport/11881670/Volkswagen-emissions-scandal-is-my-car-affected.html
Volkswagen Scandal: How Two Campaigners Exposed the World’s Biggest Car Company.

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(2015). Telegrah Media Group Limited. Retrieved from
http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/11883343/volkswagen-
scandal-campaigners-expose-world-biggest-car-company.html
Whistleblower Protections Under the Sarbanes-Oxley Act: A Primer and A Critique. (2007).
Fordham Journal of Corporate & Financial Law, 12 (5), 831-839. Retrieved from the
Strayer University database.

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(2015). Telegrah Media Group Limited. Retrieved from
http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/11883343/volkswagen-
scandal-campaigners-expose-world-biggest-car-company.html
Whistleblower Protections Under the Sarbanes-Oxley Act: A Primer and A Critique. (2007).
Fordham Journal of Corporate & Financial Law, 12 (5), 831-839. Retrieved from the
Strayer University database.