Introduction
Whistle blowing is simply an attempt by an employee to disclose a wrongdoing within the organization. Whistle blowing in most instances is either internal or external. External whistle blowing can be justified where it is necessary to prevent absolute wrong that an individual has the moral right in addition to the moral duty to stop it.
The whistle blower
One of the famous whistle blowers that will be analyzed in this essay is Matthew Lee. Matthew Lee was a senior vice-president in the Lehman's finance division. He pointed out what he believed to be questioning accounting that was taking place at Lehman Company. As a result of this, he got fired one month later after reporting the unethical act to the auditor E & Y. Lee, therefore, became as a vital player in the downfall of Lehman and the disagreement over E&Y conducts (Clark, 2010).
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Situations surrounding the whistle blower
Lee pointed several accusations of what he considered unethical accounting practices in a memo that was sent in the year 2008 to Lehman's top executives, who asked Ernst & Young to investigate. In a written report, Lee advised the Board of Directors Audit Committee and the auditors that he believed that the Repo 105 transaction was used inappropriately boosting the firm’s balance sheet by approximately $50bn (Clark, 2010). However, the London based accounting company did not take any action. Anton Valukas who was an examiner appointed by the court found massive inconsistencies in E &Y partners’ accounts hence concluding that there were stronger justification for the legal claim against Lehman for acting in unprofessional ways.
Issues that motivated Lee
Matthew Lee was motivated to act because he discovered about 50 million on the balance sheet of the company. As part of the company’s accounting executives, Lee knew that that was falsified information for the company, Lehman Brother. It is true that in case an employee notices a wrongdoing, the company rarely gives them the chance to report the misconduct, however; the company does not obligate the staff to do so (Klein, 2016). According to Lee, he was not forced by anyone to discuss with E &Y what he noticed on the balance sheet but did so out of concern and desire to ensure that the company does what was right. Ethically, what the company was doing was wrong; therefore, Lee was after correcting the unethical act that the firm was engaging in and not for revenge or financial benefits.
Personal attributes of Lee
An effective whistleblower will require certain personal characteristics to take action (Klein, 2016). Lee was able to take critical bold steps to become a whistleblower. Lee was very courageous to stand up for the truth and point the wrongs that the company was engaging in. Lee was further able to be truthful and report exactly the unethical issue without adding or hiding more information to make the situation appear worse. Lastly, he was motivated by ethical concern rather than financial benefits.
What happened to Lee and the company?
After raising the alarm, Matthew Lee lost his job after a few months from Lehman Company. Since the company was proved to have engaged in an illegal act, they went bankrupt months later after firing Lee. They felt it necessary to lay off Lee believing that he would keep quiet if he were not working with the company. It is true that Matthew Lee received no bonus. Before completing auditing Lehman Brother, the company went into bankruptcy. Several other people helped with the investigation that led to the downfall of Lehman (Clark, 2010).
Conclusion
External whistle blowing is justified in the event where other means such as internal whistle blowing to prevent wrong has failed and when the harm to be avoided is serious than the harm that whistle blowing will cause to other parties. Matthew Lee believed that he had a team that would support thus decided to reach out to E &Y to help him point out the wrongdoings by the company that led to its downfall.
References
Clark, A. (2010). Financial: Lehman whistleblower lost his job weeks after raising alarm: Retrieved from https://www.theguardian.com/business/2010/mar/16/lehman- whistleblower-auditors-Matthew-lee
Klein, G. (2015). Ethics in Accounting: A Decision-making Approach . John Wiley & Sons.
