medium · LSAT Logical Reasoning

Until recently, employees who blew the whistle on corporate fraud were protected from retaliation only if they reported the misconduct to a government agency. A new appellate ruling extends that protection to employees who report fraud internally, to their own company's compliance department. The court reasoned that internal reporting is often the fastest route to stopping ongoing fraud, and that punishing employees for using it would discourage exactly the conduct the law was designed to encourage.

Which one of the following most accurately expresses the main conclusion of the court's reasoning?

  1. Anti-retaliation safeguards ought to cover workers who disclose wrongdoing through their employer's own compliance channel, not solely those who go to regulators.
  2. Internal reporting is generally the quickest available means of halting fraud while it is still occurring.
  3. The whistleblower statute was originally enacted in order to encourage employees to come forward about corporate fraud.
  4. Every employee who suspects any workplace impropriety must report it internally before any external disclosure can be protected.
  5. Government agencies have historically been the only bodies authorized to investigate allegations of corporate fraud.

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