Michael Woodford has been recognized with the 2012 Cliff Robertson Sentinel Award by the Association of Certified Fraud Examiners (“ACFE”) for the whistleblower actions that allegedly led to his ousting from the company. As the new CEO of Olympus Corporation, Mr, Woodford exposed alleged fraud at his own company. The allegations involved improper accounting attributed to multiple acquisitions in an effort to cover up decades of investment losses. The situation resulted in shareholder lawsuits, fines by the Tokyo Stock Exchange and the arrest of the compliance officer, the chairman of the board, and a former auditor.
Having a system in place to encourage whistleblower complaints is an integral part of fraud prevention and detection. According to the ACFE’s 2010 Report to the Nations, the average duration of a fraud scheme is reduced by 7 months and the median loss is reduced by 59 percent when a fraud hotline is in place.