New York Employment Attorneys Blog

Michael Woodford, former CEO of 96 years old japanese Olympus, became one of the world's most famous whistleblowers a few weeks ago after going public with accusations of massive accounting fraud.

Mr. Woodford, a British citizen, was the first non-japanese CEO of Olympus and had been with the company for over 30 years. Within weeks of noticing something was wrong with Olympus' accounting, due mostly to a little-known Japanese magazine, Mr. Woodford vocalized his concerns. The magazine article raised questions about advisory fees of $687 million paid in 2008 for the purchase of Gyrus, a UK medical instruments firm. The article also questioned the $773 million paid for three small Japanese companies. In short, the article alleged a $1.4 billion cover-up and accounting fraud, a figure more than three times Olympus' 2010 profits.

Mr. Woodford began inquiring about the articles' allegations to Olympus' former president, Mr. Kikukawa and to Mr. Kikukawa's right-hand man, Mr. Mori. Mr. Woodford realized something was wrong.

Mr. Woodford blew the whistle on September 23 by writing an eight-page letter of concern, reflecting issues from the magazine story and sent it to Mr. Mori, copying the entire Olympus board. It then escalated into an "e-mail war", according to CNN, which led Mr. Woodford to send various additional letters to Mr. Kikukawa.

Instead of responding to Mr. Woodford's requests, the Board attempted to silence him by giving him the title of chief executive officer, which Kikukawa had held on to previously, effective October 1. Later on, Mr. Woodford informed Olympus' auditing firm Ernst & Young of his financial concerns as well as ordered an independent report from PricewaterhouseCoopers.

A week letter, report in hand, Mr. Woodford sent his final e-mail to the board, attaching the report and asking for the resignation of Mr. Kikukawa and Mr. Mori. Instead, on October 14, the Board of Directors decided to fire Mr. Woodford as CEO.

In large part, because Mr. Woodford blew the whistle on Olympus' financial fraud the company lost 75% of its stock value and is under a December 14 deadline to refile financial statements to the Tokyo Stock Exchange or it will no longer be able to trade.

Mr. Woodford formally retired on November 30 from the position he previously held on the Olympus board.

The 405 freeway is infamous for being one of California's largest and most congested freeways. Even if you've just visited Southern California, you've probably heard of this nightmare of a freeway.

Now the 405 is becoming known for more than just its constant congestion and its around-the-clock rush hour conditions. Recently, after receiving tips from a whistleblower, investigations into Caltrans' bridge safety began revealing falsified reports and potentially dangerous conditions. These potentially dangerous conditions arise out of inadequate safety tests, in which tests were fabricated and improper tools were used.

Are you aware of safety violations in your workplace? Have you complained about those safety violations and been retaliated against? Contact an attorney today.

In 2009, a group of nurses filed an anonymous complaint with the Medical Board against Dr. Rolando G. Arafiles, Jr, alleging official misconduct. The complaint alleged that Dr. Arafiles used herbal remedies and tried to use hospital supplies to perform at-home procedures. The Texas sheriffs office and prosecutors then investigated the nurses who filed the complaint and charged them with felonies.

Dr. Arafiles retaliated against the two nurses for reporting him. On November 7, 2011, the doctor plead guilty to retaliating against the two nurses and for misuse of official information.

As part of his plea arrangement, Dr. Arafiles will surrender his medical license, serve two months in jail and be on probation for five years. Due to national outrage from nursing associations around the country, the Sheriff and prosecutor who improperly investigated, these whistle-blowers, are now being charged with felonies as well.

While it is typically unusual for employees to be prosecuted by the federal government for safety violations, it does happen. Hughie Elbert Stover, age 60, knows this all too well. The trial of a former chief of security for a West Virginia coal mine, whose explosion last year left 29 workers dead, began yesterday, the charges ranging from lying to federal investigators to destroying evidence.

The charges stem from the information provided to the federal government by former employees. One employee testified that Mr. Stover directed him to destroy thousands of documents related to mine safety and security in the middle of the federal investigation. Other employees have testified that Mr. Stover trained security guards to warn mine personnel of safety inspectors, putting them on notice of an impending inspection. Supporting documentation even suggests that the mine used multiple sets of books to conceal safety violations from inspectors.

Follow the trial as it progresses.

Does your employer ask you to violate what you know, or believe to be, a safety regulation? Do you believe your employer is asking you to participate in unethical or even illegal activities in regard to safety standards? Call The Harman Firm today to explore your rights.

Blowing the whistle can be a daunting task, especially for an employee working for a large corporation like CVS. However, it can be rewarding on many levels.

Based on a complaint filed by a CVS employee in Minnesota alleging that CVS overcharged for Medicade perscriptions, CVS has agreed to pay the federal and state governments more than $17 million. The claims stem from CVS failing to follow proper procedures, like submitting claims to third party insurers. Following the lawsuit, CVS has also agreed to government monitoring for the next three years. The CVS pharmasist responsible for exposing the illegal practices will receive $2.5 million in compensation.

Find out more on CNN.

Have you ever found yourself in a situation at work that you knew or thought was illegal? Contact an attorney today.

The stock market booms and bursts of the 1980s, rife with insider trading and other financial impropriety led to development of incentives and bounties for coming forward with information about such illegal activity. However, the New York Times reports that in the twenty-plus years since these rules were introduced less than $160,000 has been paid out to whistle-blowers. This pittance is the result of leaving the decision to give awards out to regulators who are often reluctant to levy fines against companies or pay out the so-called bounty.

Now, Congress is looking at recent fraudulent activity in the securities sector and is proposing an overhaul of the reward system for reporting illegal behavior. The new rules would require a payment whenever there are penalties in excess of $1 million dollars against a company or entity.

Naturally, businesses and trade groups are lining up against the measures. Opponents of the law say that it unfairly incentives the digging of dirt against a company, and hinders the ability of the company to actively comply with and fix any violations. Advocates for the change say that whistle-blowers have traditionally been overlooked and under-compensated, and that coming forward with such information has the effect of ruining careers and making employees miserable. Thus, they deserve a greater share of compensation for both the information, and the ultimate effect it has on their lives and careers.

You can read more on the history of rewards and financial regulation on the New York Times here.