In 2018, HBS associate professors Aiyesha Dey and Jonas Heese wrote a case about a whistleblower at a multi-national gambling company who exposed financial misstatements, first to his manager and later to the US Securities and Exchange Commission. The case focused on the company’s response to the complaint, but the class discussion turned to the motivations of the man who revealed the wrongdoing.
Have you ever thought about blowing the whistle? Dey asked her students. Their response: We’ve thought about it, but it is so costly.
At a time when regulators and employers alike are increasingly relying on whistleblowers to prevent and investigate fraud, the professors realized, there is little understanding about the real risks faced by an employee who steps forward. Dey and Heese set out to study the experiences of about 2,400 whistleblowers who filed lawsuits under the False Claims Act, which rewards whistleblowers who report fraud against the federal government with a percentage of the money recovered. “We need to understand the costs,” explains Heese, “and how to empower the people who have important information to share that information.”
April White: Do you think regulators have the necessary tools to encourage people to come forward with information?
Jonas Heese: Our research focuses on specific legislation known as the False Claims Act, which was the first cash-for-information whistleblower law in the world. It goes back to the Civil War, and it has been adopted by...
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