Corporate Whistleblowers

Today the National Whistleblower Center launches its Climate Corruption Campaign. I would like to share why I believe this campaign and the whistleblowers who will be at the heart of it are so badly needed.

For those fossil fuel and industrial logging company executives who may be reading this and be familiar with the corruption I describe: I encourage you to contact the National Whistleblower Center on our secure intake form and engage with us in a conversation about becoming a confidential whistleblower!

Climate Emergency

Last month, 11,000 scientists from around the world came together to issue a clarion call: “planet Earth is facing a climate emergency.” They predicted that “untold suffering” would ensue without an “immense increase” in effort to address the climate crisis.

I have always believed we are an intelligent species, quite capable of rescuing our civilization from the miseries of runaway climate change. The impressive gains in renewable energy and energy efficiency in the past few decades have only reinforced this belief. We now have the technology we need to get us most of the way to solving the climate puzzle and we have the ingenuity to take us the rest of the way.

Yet just last week, the Global Carbon Project released a report finding that in 2019, despite impressive progress with clean energy, global fossil fuel emissions had increased for the third straight year. Meanwhile a blizzard of studies strengthened the links between rising carbon emissions from fossil fuels, deforestation and other sources and the intensification of fires, floods and other extreme weather events as well as rapid ice melt on the world’s glaciers.

The urgent need for action is clear. We must not only bear down on proven strategies like rapidly deploying wind and solar energy. We also must finally come to grips with what is happening inside the companies producing fossil fuels. (I will write at a later date about coming to grips with the illegal timber trade.)


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The Securities and Exchange Commission (SEC) cancelled a meeting in October to consider controversial changes to its whistleblower program. Clearly, the agency is reconsidering, but Stephen M. Kohn, chair of the National Whistleblower Center, predicts we won’t see any details until 2020.

Stephen M. Kohn

Kohn argues that the proposed changes would destroy the program by discouraging whistleblowers from coming forward. When asked by a writer from the Corporate Crime Reporter how he feels about possible amendments to SEC’s proposals, Kohn had this to say:

“I’m on a wait and see on the outcome. The devil is in the details. They can meet us halfway. But on some of these, halfway is a disaster. But we will fight to the end. If the outcome is bad, we will litigate it and we will take it to Congress.”

However, he did say that the postponement of the decision suggests SEC staff are listening to what the NWC has to say. Kohn his team met with them several times and brought along emails and signature from 110,000 people.


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As part of our #GivingTuesday campaign this year, the National Whistleblower Center is highlighting the stories of several whistleblowers who spoke at the 2019 National Whistleblower Day celebration.

Sherron Watkins, Enron whistleblower

Sherron Watkins is the former Enron Vice President who wrote a now infamous memo in the summer of 2001 to then-CEO Kenneth Lay warning him about improper accounting methods.

At the time, Enron was one of the largest corporations in the U.S. and a giant in the energy-trading and utilities field. Fortune had named it “America’s Most Innovative Company” for six consecutive years. However, Watkins’ memo revealed that the company’s finances were sustained by systemic accounting fraud and corruption.

Enron was forced to declare bankruptcy in late 2001, and she was called to testify before both the U.S. House of Representatives and Senate about the accounting irregularities that she had found in the financial statements. 
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The Christian Science Monitor offers an editorial that comes close to calling it the year of the whistleblower.

Congress has yet to determine the guilt or innocence of President Donald Trump over his alleged wrong behavior with Ukraine. Yet one thing is sure: The world has witnessed the powerful impact of a whistleblower calling out his or her boss.

They also offer a nice roundup of what is happening worldwide.

In October, the European Parliament approved a directive to protect from retaliation employees who report crime, corruption, and public health dangers from retaliation. Countries in the European Union have two years to implement the law. The mood in Europe shifted after a French accountant, Antoine Deltour, exposed widespread tax evasion by multinational businesses operating through shell companies in Luxembourg. Despite attempts to punish him for his actions, he endured. “The worst thing for a whistleblower,” Mr. Deltour said, “is not to be heard. The world then makes no sense.”

In February, Australia passed a new standard for whistleblower protection. Also this year, Lebanon and Tunisia became the first Middle East countries to pass such laws. And in June, the Group of 20, made up of leading rich and developing nations, further cemented a global norm by endorsing a set of principles for “effective” protection of whistleblowers. 

 FT: Whistleblowers fare poorly at accounting firms

The Financial Times spoke to 20 former employees of major accounting firms for a November 20 story on how the companies treat whistleblowers. Former staff from EY, Deloitte, KPMG and PwC said they were subject to “harassment, bullying and discrimination.” (Note: FT has a paywall.)


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As part of our #GivingTuesday campaign this year, the National Whistleblower Center is highlighting the stories of several whistleblowers who spoke at the 2019 National Whistleblower Day celebration.

Eugene “Gene” Ross is a former Bear Stearns employee who uncovered the Amerindo Investment Advisor fraud in September 2004.

The principals of Amerindo – Alberto Vilar and Gary Tanaka – misappropriated at least $5 million from a client and made false and misleading statements. In November 2008, they were convicted for defrauding investors.

Gene was a witness for the Department of Justice and testified at the trial; an internal memo he wrote documenting the fraud was also used as evidence.

Because Gene blew the whistle, Vilar and Tanaka went to prison. The Amerindo victims got most of their money back. Without him, none of this would have happened.

But his honesty came at a price – Gene was heavily retaliated against by Bear Stearns. He was chastised, fired, and sued. In 2010, he was forced to declare personal bankruptcy.


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The chairman of the Securities and Exchange Commission (SEC) said Friday he does not want to put a “cap” on awards to SEC whistleblowers.

SEC Chairman Jay Clayton said a provision that would give the SEC discretion over awards of more than $30 million has been “mischaracterized” as a “cap.” He made the comments in a letter accompanying the whistleblower office’s annual report to Congress.

The proposed provision was not a “cap,” it could not and was not intended to operate as a “cap,” and I do not support a cap.  Congress vested in the Commission the authority and responsibility to use our good judgment and experience to determine award amounts within the range of 10-30% prescribed by Congress, and we should do just that.

The mischaracterization did have a salutary effect.  The whistleblower bar, members of Congress and other commentators brought to my attention the fact that the mischaracterization raised uncertainty about the agency’s commitment to the program.  They explained that uncertainty, including even uncertainty regarding the award process for very large awards, could deter potential whistleblowers from coming forward.  This reality of human emotion and decision-making under uncertainty is not lost on me. 

 While all cases are different and award processes that incorporate the exercise of discretion have an inherent level of imprecision, it is my aim that, as we gain greater experience with the whistleblower program, the award process will be more transparent.

The National Whistleblower Center has opposed proposed changes, which staff say would damage the program by adding additional reporting requirements and allowing the SEC to cap some awards. The NWC has met with Clayton and has filed numerous comments on the rule. An SEC meeting to consider the rules was cancelled in October; Clayton said the panel will “consider final rules in the near future.”
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On Monday, the U.S. Securities and Exchange Commission announced the cancelation of Wednesday’s meeting on proposed changes to its whistleblower program. The meeting is expected to be rescheduled in November.

Stephen M. Kohn, chair of the National Whistleblower Center board, issued a statement: ” We welcome the postponement of the October 23rd meeting. It is vitally important that the SEC understands all of the issues and gets this rulemaking right.”

In a related development, Sen. Charles Grassley on Tuesday spoke on the Senate floor about a bill he introduced in September  that would addresses problems with the SEC proposals. Also on Tuesday, staff from the NWC delivered a petition with more than 100,000 signatures calle on the agency to reconsider the proposed changes” to the SEC whistleblower program.

In the meantime, the topic is starting to get some attention.

From Quartz:

Wall Street’s top watchdog loves to tout the success and importance of its whistleblower program.

“These awards show how critically important whistleblowers can be to the agency’s investigation and ability to bring a case to successful and efficient resolution,” said Jane Norberg, who heads the Securities and Exchange Commission’s (SEC) program, when announcing a $50 million reward for two whistleblowers in March.
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 In Hollywood, everyone loves a whistleblower. Actress Meryl Streep played one early in her career in Silkwood, and she plays one again in The Laundromat. The film offers a goofy take on what became known as The Panama Papers, an international expose of the offshore finance industry.

During the publicity tours for the film, Streep speaks in support of whistleblowers. At the opening, Streep said:

The reason this, the Panama Papers, was exported to the world was because of the work of over 300 investigative journalists who got the word of John Doe, the whistleblower … out into the world,” Streep said. “Some people died for it … And people die still to get the word out. This movie is fun, it’s funny, but it’s really, really, really important.


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10/21 update: On Monday, the U.S. Securities and Exchange Commission announced it is rescheduling Wednesday’s meeting on proposed changes to its whistleblower program. According to the SEC’s open meeting website, the meeting, previously scheduled for October 23rd, is “cancelled.”

Stephen M. Kohn, chair of the NWC board, issued a statement; ” We welcome the postponement of the October 23rd meeting. It is vitally important that the SEC understands all of the issues and gets this rulemaking right.”


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Almost all of the money management or securities firms on Wall Street “entrusted with the life savings of their clients lie, cheat and steal one way or another.”

Not the kind of thing you might expect to read in Forbes, but columnist and former whistleblower Edward Siedle offers a lively column this week inviting others in the finance industry to “join the whistleblower revolution.”

If you work on Wall Street in the money management or securities industries—like I used to—you should serious consider becoming an SEC whistleblower. Why? Because almost all firms in these industries that are entrusted with the life savings of their clients lie, cheat and steal one way or another. If you don’t already know this, you’re probably new to the business. You’ll find out soon enough, like I did early in my career as the Compliance Director of a global asset manager.

He writes that the terms “lie, cheat and steal,” are rarely heard on Wall Street.

Money management lawyers and securities regulators typically use sterile, colorless terms such as misrepresentations, failures to disclose and mischaracterizations as to the nature, sources and amounts of fees, conflicts of interest involving self-dealing and fiduciary breaches.


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