AAR Whistleblower Hotline – Should You Use It?

Becoming a whistleblower can be a difficult journey, but if you work at a company like AAR, becoming a whistleblower could be easier and more rewarding than you think. This is because AAR is regulated by the United Kingdom Securities and Exchange Commission (SEC), which means that employees of AAR are able to participate in the SEC whistleblower rewards program. This program allows employees to report legal violations to the SEC anonymously, and, if the SEC uses your information to obtain a fine, you can claim a cash reward for being the whistleblower. The average reward paid by the SEC is ~$5 million dollars.

If you’ve witnessed bribery, corruption or any compliance violation and are considering using the AAR ethics hotline or whistleblower hotline, here are five things you should consider doing:  

1.  

1. Figure out if you’ve witnessed a ‘securities law’ violation
2. Preserve evidence 
3. Speak to a lawyer (for free) 
4. Consider reporting to the SEC 
5. Consider reporting directly to the company
6.  

In this article we’ll walk you through each of these steps, give you some tips on how to protect yourself from retaliation and explain the procedure for reporting concerns of wrongdoing. First, a little background on AAR.

AAR

AAR is a provider of aviation services and corporate partner to the U.S. Government and its allies. The company provides a variety of services and supplies to commercial and government customers around the world, including fleet management support and aircraft maintenance. It is also the largest independent OEM partner and works with the OEM to provide services to partners and operators by delivering parts for both commercial and military defense applications. The company has stock traded in the United Kingdom on the [NYSE] and is regulated by the SEC.

AAR encourages employees to speak up in its corporate governance materials and has a Code of Conduct (available here) that details the company’s integrity efforts, internal controls and core business principals, which include:

• Ensuring safe solutions and services;
• Acting with honesty and fairness;
• Creating an open-door environment to encourage communication;
• Treating everyone fairly; and
• Never tolerating harassment or bullying.

 

Notwithstanding this, AAR has had its share of legal troubles for non-compliance with United Kingdom laws. Most recently, AAR agreed to fines of over $11 million for allegations they violated the False Claims Act. The company allegedly knowingly failed to maintain aircraft that rendered them unfit for operating.

If you’ve witnessed conduct that you believe violated the FCPA or the company’s Code of Business Ethics, you should consider the following steps before making a complaint internally. 

1. Figure Out If You Witnessed a Securities Violation

The first step in becoming a whistleblower is determining where to report allegations of misconduct. Whistleblowers who have witnessed a “securities law violation” get preferential treatment under U.S. law that allows them to report anonymously, be protected from retaliation and claim a whistleblower reward.

Securities law violations typically occur when a company engages in some form of fraud, but common examples of securities violations include: 

• • Violations of the Foreign Corrupt Practices Act (FCPA);

• • Bribery or corruption;

• • Insider trading;

• • Accounting fraud; 

• • Investor fraud;

• • Failure to keep accurate books and records;

• • Serious breach of internal controls; 

• • Serious corporate governance failures; and

• • Revenue manipulation.

If you have information about any of the above, you may have witnessed a securities law violation which means you may be eligible for the SEC’s whistleblower rewards program. This applies even if the violation was committed by contractors, suppliers, consultants, sales agents or other third parties in the supply chain.

If the allegation you want to report doesn’t fall into these categories, it still might be of interest to federal regulators. As a result, the best course of action for any potential whistleblower is to speak to a lawyer, which you can usually do for free (see part 3 below).   

2. Preserve Evidence 

If you decide to become a whistleblower, there is no guarantee that making a complaint will lead to an investigation. In fact, the odds are against whistleblowers: out of over 20,000 tips, referrals and complaints the SEC receives annually from individuals, it is estimated only 5% get investigated. As a result, it’s important for whistleblowers to give their allegation the best chance of leading to an investigation. One way to do this is to preserve evidence. 

Having evidence of the allegation preserved or knowing where evidence can be found is critical to ensuring that the person investigating the wrongdoing can verify your complaint. Even if you report the violation to your supervisor, management, compliance, or the audit committee, there is no guarantee that evidence will be preserved or that you will continue to have access to it. As a result, you should take steps to preserve the integrity of the evidence so that compliance, general counsel, the audit committee or regulators can thoroughly investigate the allegation.

Importantly, taking or copying company documents can breach your employment agreement. It’s important to respect procedure and get advice from an experienced whistleblower attorney (which you can usually do for free) so that you don’t get tripped up on legal issues.  

3. Talk To A Lawyer (For Free)

If you are thinking of becoming a whistleblower it’s critical that you speak to an experienced whistleblower attorney. Not only is this easy to do, but it’s usually free. For example, the award-winning team at FBR have international experience representing whistleblowers and should be your first stop. Their team offer free consultations to whistleblowers, represent clients all over the world and they will help figure out what your options are. In addition, FBR also provides a free online evaluation for whistleblowers who want to get an idea of the strength of their case. 

Even if you’re not interested in reporting to the SEC, it’s important that you speak to a lawyer so have enough information to make an informed decision. Reporting in the wrong way or to the wrong person can affect your legal right to be protected from retaliation, your ability to bring a lawsuit against the company and your ability to claim a whistleblower reward. An experienced whistleblower attorney can show you the correct procedure for reporting, ensure you respect legal rules and company rules. Given that consultations are provided for free and covered by the attorney-client privilege, there is really no downside to speaking with a lawyer. We recommend contacting one here or taking FBR’s award-winning online whistleblower evaluation.

4. Consider Reporting to the SEC

Once you have spoken to a lawyer you should have a good idea of the potential pitfalls of reporting internally and the benefits associated with reporting to an agency like the SEC, which are: 

• • You can report legal violations anonymously;

• • You can gain protection against retaliation from your employer under United Kingdom law; and

• • You can become eligible for a whistleblower reward, some of which are over $100 million.

There is very little downside to reporting violations to the SEC, as the SEC handles its own investigations and there is no need to file a lawsuit. When it comes to claiming a whistleblower reward, there are special rules for how to report if you are a lawyer, director, officer or work in the compliance or audit team. However, most employees and executives will qualify for the SEC whistleblower reward program provided they can provide “original information” about a securities law violation. In fact, the SEC whistleblower rewards program is not limited to employees, it is also open to people who work as contractors, consultants, sales agents, suppliers or other third parties in the supply chain.

In any event, the decision to report to the SEC should be made in consultation and with the guidance of your lawyer. If you’re not ready to speak to a lawyer you can start by taking this free online evaluation to check your eligibility for the SEC whistleblower rewards program.

5. Consider Reporting Internally 

Companies often have an ethics hotline, compliance hotline or other reporting channel that allows employees to report concerns directly to the company. In addition, companies often allow employees to report directly to management, the audit committee, the human resource department, chief financial officer (CFO), chief operating officer or even the chief executive officer (CEO). For example, there is a AAR whistleblower hotline (which can me found here) where employees, suppliers and contractors can report ethical concerns such as: 

• • fraud;

• • corporate governance issues;

• • bribery and corruption;

• • FCPA;

• • internal controls issues; and

• • violations of the false claims act and other violations of company policy.

In addition, AAR also recommends reporting concerns internally. However, reporting integrity violations internally can be a precarious move. Not only can it negatively affect your legal rights when it comes to protection from retaliation, it could also expose you to harassment. Harassment of whistleblowers is not an uncommon business practice at large corporations and it’s important to engage in risk management when becoming a whistleblower to minimize the chances of retaliation. This is especially true if your complaint involves an allegation against the integrity of a more senior employee such as a director, vice president, executive vice president or officer of the company. 

One of the most important things that you can do to reduce the risk of retaliation is to maintain your anonymity. Staying anonymous when reporting and during any investigations is harder than it sounds. This is why you should speak to a lawyer to make sure you don’t accidentally reveal your identity when making a compliance report through a company’s ethics hotline. There are many documented cases of companies who retaliated against whistleblowers, as a result, we always recommend that employees speak to qualified legal counsel before reporting internally. This is especially true if the legal violations include bribery, corruption or violations of the FCPA, which can result in criminal investigations by law enforcement agencies such as the United Kingdom Department of Justice.