Appointed just a few weeks earlier

(whistleblower?)
Realized this half a year after the fact
Already has his suspicions as to why the team was working so late
People who made the changes (wiping out almost a million in accrued
liabilities as well as other changes that ultimately had a positive effect on net
income so that there was an EPS of 1 cent as opposed to being negative
o Former COO now CEO (James Dooley), corporate controller, several
senior members of the finance team
Okumoto himself comes from a very hard upbringing and very hard working,
honest parents
His mother instilled a strong ethical background into him from a very young
age, and he was exposed to accounting as a kid
Strong ethics from his accounting mentors as well
Over 6 decades of history
Huge decline in net income and share value after the economic crisis in 2001
Previous year (2002) also had an awful year, with sales revenue dropping
over 60% probably scaring the CEO and others
New Sarbanes-Oxley Compliance Rules
General Counsel Jack Isselmann is trying to cut costs with retirement benefits
to the Japanese office, might the one to blame
James Dooley also supports the cutting of benefits when he clearly does not
know Japanese law and is being shady in general (very defensive when
confronted)
Dooley said he would quit if he has to reverse the retirement entry
($977,000) and was visibly angry
Isselmann said Dooley bullied him when it he brought up the fact that what
was being done was illegal (first job in the industry, was going to get fired if
he did not comply)
Dooley is also very intimidating at 66 and 280 pounds
Japanese law says retirement benefits are not required but once stated they
need to be followed through with (Toshihiro So is the company)
The policy was one month of pay for each year of service, employees in
Japan, Korea, and Taiwan mostly in sales and customer support roles
Dooly did not report the memo to KPMG and the audit committee
Tetsui said he will retire before telling his employees the bad news
Company was having informal merger discussions and KPMG said that their
revenues were actually much lower than expected for Dooly was fishing for
revenue to make the company look good
Finance staff questioned the benefits reversal but did not bring it forward
because they were under the leadership of Dooly and they were bullied and
intimidated
KPMG was new to the account so they took Doolys word for it
People at the company dont see it as a really big deal

Okumoto is making a really good salary with the potential for a great bonus
so he is conflicted
Alternatively, he can leverage this knowledge to a higher salary and more
benefits
He is in a financially well off position, and has a massive network of people to
contact in case he loses his job
Potential legal risk if he does not act
He knows a lot of people on the board of directors and Dooley is the only
insider on the team
Previous situation where he didnt act and was subsequently punished for it
Japanese employees make the most money

Whistleblower protection varies on a state to state basis so it is imperative that you

do the proper research in the specific state that you are in.

California: We need a clear and concise statement of what you are alleging is an
improper act, why you believe it is improper, and what evidence there is to confirm that
what you are saying is true;
If you don't provide a name or other information that clearly identifies the person
you are alleging to have acted improperly, and the department where that person
works, we may not know who to investigate;
If you do not identify witnesses or documents that will support what you are
saying, we may not be able to verify that what you are saying is true;
While you may submit a complaint anonymously, we may not be able to
determine whether your complaint has merit if we are not able to interview you;
Submitting copies of any documents that will support your complaint is
extremely helpful to our evaluation process. However, please submit copies of the
documents, rather than the original documents, as they cannot be returned. If we need
the original documents we will ask you for them later.
First US law adopted specifically to protect whistleblowers in the United States was
the False Claims Act which encourages people to speak out by promising them a
percentage of the money recovered by the government (15-25%) and by protecting
them from employment retaliation (qui tam private individual who assists the
prosecution can receive all or part of any penalty imposed
Sarbanes-Oxley Act of 2002 that deals specifically with corporate fraud
whistleblowers
Normally the jurisdiction falls under the United States Department of Labors
Occupational Safety and Health Administration specifically at the office of the
whistleblower protection program
The rules and regulations vary depending on the state as well as the type of crime
being alleged

Federal employees facing discrimination have up to 45 days to make a written claim

to their equal employment officer
Corporate fraud whistleblowers have 90 days to report a complaint to the OSHA
Protections Offered to Whistleblowers:
1. An employer may not make, adopt, or enforce any rule, regulation, or policy
preventing an employee from being a whistleblower. 2. An employer may not
retaliate against an employee who is a whistleblower. 3. An employer may not
retaliate against an employee for refusing to participate in an activity that would
result in a violation of a state or federal statute, or a violation or noncompliance
with a state or federal rule or regulation. 4. An employer may not retaliate against
an employee for having exercised his or her rights as a whistleblower in any former
employment.
A lot more protection and legislation for federal employees
How to report improper acts:
If you have information regarding possible violations of state or federal statutes,
rules, or regulations, or violations of fiduciary responsibility by a corporation or
limited liability company to its shareholders, investors, or employees, call the
California State Attorney Generals Whistleblower Hotline at 1-800-952-5225. The
Attorney General will refer your call to the appropriate government authority for
review and possible investigation.
Defendants found liable under the False Claims Act may have to pay as much as three times the
government's losses plus penalties for each false claim.

Sarbanes-Oxley Act (SOX). [18 U.S.C. 1514A] Protects employees of certain companies
who report alleged mail, wire, bank or securities fraud; violations of the SEC rules and
regulations; or violation of federal laws related to fraud against shareholders. The Act covers
employees of publicly traded companies and their subsidiaries, as well as employees of
nationally-recognized statistical rating organizations. 180 days to report
How to report:
1.

Online - Use the Online Whistleblower Complaint Form to submit your complaint to
OSHA. Complaints received online from workers located in states with OSHA-approved
state plans will be forwarded to the appropriate state plan for response.

2.

Download and Fax/Mail - Download the Notice of Whistleblower Complaint Form

(OSHA 8-60.1) PDF*, 306 Kb, complete it, and then fax or mail it back to your local OSHA
Regional or Area Office.

3.

Telephone - Call your local OSHA Regional or Area Office. OSHA staff can discuss
your complaint with you and respond to any questions you may have.

4.

Letter - You may also send a letter describing your complaint to your local OSHA
Regional or Area Office. Please include your name, address and telephone number so we
can contact you to follow up.

The whistleblower protection clause within qui tam is one of the strongest protection clauses
in federal law. It not only protects him, or her, but anyone who investigates, initiates, testifies
in furtherance of, or assists in a case.
In Section 3730(h) of the amended law, whistleblowers who have proven harassment are
entitled to all necessary relief necessary to make the employee whole including
reinstatement with the same seniority status two times the amount of back pay, interest
on any back pay, and compensation for any special damages. This clause not only helps
the whistleblower keep his, or her, job if they are still employed while the case is
proceeding, but also makes a company think twice about harassing any employee who
cooperates with exposing the fraud.
Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including
interference with the lawful employment or livelihood of any person, for providing to a law
enforcement officer any truthful information relating to the commission or possible commission of
any federal offense, shall be fined under this title, imprisoned not more than 10 years, or both.

WHAT SHOULD HE DO?

Intro: Give examples of unethical behavoir that has led to the collapse of giant
companies (Enron, Authur Anderson, Worldcom)
Recommendation: Bring up his past
Stakeholder Analysis: Blame is going to fall to him, especially with his experience
Conclusion