Hazy future for whistleblowers? Don't count on it
The conventional wisdom lately has been that we live in a Golden Era for whistleblowers. We've seen some huge rewards handed out.
A great example is Sherry Hunt, who is still a vice president at Citigroup and who as a quality assurance employee was privy to information indicating that the bank was illegally closing deals. She took home $31 million for her whistleblowing efforts. Then there's former Countrywide appraisal manager Kyle Lagow, who had evidence that Countrywide was inflating the value of homes to support bigger loans. His information led to a $1 billion settlement, and his take was $14.5 million. Don't forget Bradley Birkenfeld, the former UBS banker who blew the whistle on the bank's efforts to help Americans evade taxes. He was awarded $104 million from the IRS for his role in the investigations, but not before he spent time in prison.
Aggressive whistleblowing has been encouraged by the SEC, via Dodd-Frank and plenty of other statutes. The SEC's Office of the Whistleblower has certainly been busy in its 20-month existence.
And yet the New York Times now suggests that the program has a hazy future, citing aggressive attempts by Wall Street firms to push employees to report wrong-doing internally before going to regulators. The article also notes questions about the agency's response times.
All in all, it seems way too premature to conclude that the SEC's efforts are flagging. The Commission says it fields dozens of tips a week and has "ramped up its whistle-blower team to include 11 lawyers and 3 paralegals."
Even if the program were to slow down, whistleblowing would continue. The really big awards recently have come via the False Claims Act.
- here's the article
SEC updates whistleblowers progress