CCM CCM Ethics and Whistleblower Protections 2 — Questions and Answers
Question 1: What is a key design principle for an effective ethics hotline to maximize employee use?
- Requiring employees to use their employee ID when calling
- Ensuring confidentiality or anonymity and operating 24/7 (Correct answer)
- Limiting reporting to compliance officers only
- Routing all calls through the direct supervisor
Correct answer: Ensuring confidentiality or anonymity and operating 24/7
An effective ethics hotline must be confidential or anonymous and accessible around the clock to encourage employees to report concerns without fear.
Question 2: Under the False Claims Act, what financial incentive may a whistleblower (relator) receive?
- A fixed payment of $10,000 per report
- A percentage of government funds recovered as a result of their report (Correct answer)
- Automatic promotion within their organization
- Immunity from all civil and criminal charges
Correct answer: A percentage of government funds recovered as a result of their report
Under the False Claims Act qui tam provisions, a whistleblower (relator) may receive between 15% and 30% of the government's recovery from the case.
Question 3: What is the concept of 'non-retaliation' in a compliance ethics framework?
- The organization will not report employee misconduct to regulators
- The organization commits to not taking adverse action against employees who report concerns in good faith (Correct answer)
- Employees agree not to report compliance issues externally
- Management is exempt from compliance requirements
Correct answer: The organization commits to not taking adverse action against employees who report concerns in good faith
A non-retaliation commitment means the organization formally pledges not to punish employees who report ethics or compliance concerns in good faith.
Question 4: Which of the following best describes an 'ethics ombudsperson' role in an organization?
- An external auditor who reviews financial statements
- A neutral, confidential resource employees can consult about ethical dilemmas and concerns (Correct answer)
- The officer responsible for filing annual regulatory reports
- A board member who approves major compliance policies
Correct answer: A neutral, confidential resource employees can consult about ethical dilemmas and concerns
An ethics ombudsperson serves as a neutral, confidential resource where employees can seek guidance on ethical dilemmas without fear of formal reporting.
Question 5: What is a critical responsibility of a compliance manager after receiving a whistleblower report?
- Immediately disclosing the reporter's identity to their supervisor
- Ensuring the report is investigated promptly and the reporter is protected from retaliation (Correct answer)
- Archiving the report without investigation unless it escalates
- Forwarding all reports directly to law enforcement
Correct answer: Ensuring the report is investigated promptly and the reporter is protected from retaliation
After receiving a whistleblower report, the compliance manager must ensure a timely investigation is conducted and that the reporter is protected from any form of retaliation.
Question 6: Which SEC Dodd-Frank whistleblower rule requires companies to ensure their internal reporting policies do not impede employees from reporting to the SEC?
- Rule 10b-5
- Rule 21F-17 (Correct answer)
- Rule 144A
- Rule 13e-3
Correct answer: Rule 21F-17
SEC Rule 21F-17 prohibits companies from taking actions that impede individuals from communicating directly with the SEC about potential securities law violations.
CCM CCM Ethics and Whistleblower Protections 2
What is a key design principle for an effective ethics hotline to maximize employee use?