Bloomberg commentator Susan Antilla smells a rat. Wall Street is “fighting full-tilt” against the SEC’s whistleblower proposal that would tend to expose hidden wrongdoing. The SEC is “barraged” with their objections. “That’s not how people behave unless they’re hiding something,” Ms. Antilla says in her Bloomberg.com article, “Madoff Repeat Odds Rise With Neutered Watchdog’.”
Stephen M. Kohn, executive director of the National Whistleblower Center, agrees: “”This is the most intense corporate lobbying I’ve seen in 27 years. They have to be afraid of something.”
The bone in Wall Street’s throat is a provision of the Dodd-Frank financial reform law that allows whistleblowers to receive as much as 30 percent of the sanctions in an SEC case that results in sanctions of $1 million or more. The purported reasons why Wall Street objects to the whistleblower provisions are transparent lies ? laughable.
Ms. Antilla says, tongue in cheek: “There’s some nonsense about wanting to assist the SEC, given its limited resources. There are concerns about greedy plaintiffs’ lawyers who will inundate the agency with frivolous claims that companies are best suited to weed out. Finally, there is the estimable corporate goal to learn about misconduct pronto so that management can clean things up. And if those greedy whistle-blowers seeking bounties are hiking off to the SEC with the dirt before the company can find out, how are virtuous corporate citizens ever going to be able to do the right thing?”
The worried companies will apparently stop at nothing to shut down the new law. Some corporate objectors have even asked the SEC to allow them to enforce strong-arm company rules that provide for retaliatory by termination of whistleblowers that do not report their concerns internally before reporting them to the SEC. “Under that sort of scenario, the employee who spilled the beans to a regulator, but not to the company, could risk being fired for cause, and the company might avoid being liable for retaliation,” according to Ms. Antilla.
She cites one example in which a JPMorgan Chase broker, allegedly the second-highest producer in her department, was allegedly fired less than a week after recommending the firm end its relationship with a client she suspected of money laundering.
These corporate tactics could backfire. “The more pressure you put on the SEC to force people to report directly to the company, the more likely these people will go to places like WikiLeaks,” Lynn E. Turner, former chief accountant at the SEC, was quoted as saying.
The SEC named Sean McKessy, corporate secretary for cigarette maker Altria Group Inc. and a former SEC enforcement attorney, to head its new whistleblower office. This move was viewed as “disappointing” by whistleblower advocates. “Even if he’s the right man, it’s sending the wrong message,” Kohn was quoted as saying.
Page Perry has over 125 years collective experience representing institutional and individual investors in securities-related litigation and arbitration all over the country. Page Perry is also active in representing whistleblowers. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 40 occasions.