Congress enacted the Sarbanes-Oxley Act of 2002’s (“SOX”) whistleblower protection provision to combat a “corporate code of silence,” a code that “discourage[d] employees from reporting fraudulent behavior not only to the proper authorities, such as the Federal Bureau of Investigation and the SEC, but even internally.” S. Rep. No. 107-146, at 4–5 (2002). Responding to the Enron scandal, Congress sought to ensure that whistleblowers could serve as an effective early warning system for companies and help prevent future scandals.
Courageous Enron whistleblower Sherron Watkins blew the whistle to Enron executives and suffered retaliation for her whistleblowing. Her riveting Congressional testimony helped spur Congress to enact the robust corporate whistleblower protection provision in the Sarbanes Oxley Act.