Big companies cooking the books seems to be a theme in the news this week, with the latest accusations coming from a former Disney employee. Sandra Kuba tells MarketWatch she has filed information with the Securities and Exchange Commission alleging the company has been overstating amusement park and resort revenue for years.

The SEC didn’t

Social media executives testified on Wednesday that they are determined to keep terrorist content off their sites, but the members of Congress who summoned them had doubts.

The House Committee on Homeland Security heard testimony from representatives of Facebook, Twitter, and Google.

“On terrorist content our view is simple: There is no space on Facebook for terrorists,” Monika Bickert of Facebook told the committee.

However, committee chair Bennie Thompson said social media platforms have proven “they were unable to comply” with demands to control content.


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Whistleblower programs are “an important check on a firm’s compliance,” according to a survey of nearly 200 “financial services executives.”

The survey, conducted annually by the consultants at the firm Duff & Phelps, is designed to provide “a view into how firms are grappling with the constant of regulatory compliance against a backdrop of continual change.” In addition to whistleblower efforts, the study looks at anti-money laundering programs and new technology coming online for compliance and enforcement programs.

A summary reports that nearly three-quarters of respondents confirm that they have whistleblowing programs in place and 86 percent of them “at least somewhat agreeing that such programs should be mandatory.” Between one-quarter and one-third of firms feel the programs are firms are either “very” or “completely” effective.

At the same time, some are less confident in individual elements of the programs. More than one-quarter of the respondents describe their firms’ ability to evaluate the complaint and to “implement an appropriate response” to a whistleblower to be “not-at-all” effective or “somewhat” effective.  
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Whistleblower protection has changed dramatically in the past 15 years, says Stephen M. Kohn, chair of the National Whistleblower Center. Writing in the international publication “Ethical Boardroom,” Kohn spells out the changes and what they mean to those on governing boards and in the C-suite.

This is all radically different than the whistleblowing depicted in popular culture. It has nothing to do with employee grievances or the stealing of national security secrets. Done correctly, an employer never learns the identity of the whistleblower and thus, traditional employment relations cases become relics of a time when whistleblowers lacked safe, confidential and effective reporting mechanisms.

These changes need to be embraced, not opposed. The issue is no longer the whistleblower, but whether a company will tolerate criminal activity in order to profit. Turning a blind eye to corruption can have disastrous consequences…Trying to silence whistleblowers is the biggest mistake any corporate executive can make.
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Danske Bank Whistleblower EU testimony
Danske Bank whistleblower Howard Wilkinson testifies during hearing at the EU Parliament Brussels, Belgium November 21, 2018.

The news program 60 Minutes had a piece on the Danske bank scandal and whistleblower Howard Wilkinson on Sunday. He exposed Russian money laundering scheme at the bank’s Estonia branch that 60 Minutes said involves $230 billion.

The piece also features comments from Stephen M. Kohn,Wilkinson’s whistleblower attorney and the chair of the National Whistleblower Center. Both men say that the bank was failing to comply with law designed to prevent money laundering.

From the transcript:

Howard Wilkinson: Being named as a whistleblower in a case involving dirty Russian money. It’s not a good place to be.

Steve Kroft (of 60 Minutes) : You’re still concerned?

 Howard Wilkinson: You’ve gotta be, haven’t you? The very nature of the people who want to launder money probably means that they’re not the sort that you wanna go down the pub and have a pint with.


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It’s Time for Facebook to be Sanctioned for Misleading Shareholders and the Public About Terror and Hate Speech on its Website 

The Securities and Exchange Commission (SEC) now has all the information it needs to sanction Facebook for its dishonesty about terror and hate content on its website, thanks to a petition filed by a whistleblower working with the National Whistleblower Center (NWC). Today, the Associated Press published an explosive story describing and confirming the key findings in the petition. 
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Wildlife trafficking on Facebook took a hit last week, with  Agence France-Press (AFP) reporting that five men were arrested in Indonesia in connection with selling Komodo dragons and other wild animals through Facebook

According to AFP:

The vast Southeast Asian archipelago nation’s dense tropical rainforests boast some of the highest levels of biodiversity in the world and it has for years been a key source and transit point for animal trafficking.

East Java police said they arrested the suspects on Java island for allegedly trafficking the large lizard, as well as bearcats, cockatoos and cassowary birds. The Komodo dragons can be sold for $1,000 to $1,400 each, they told AFP.  
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Two SEC whistleblowers have been awarded a total of $50 million for exposing conflict-of-interest problems with investment advisors at JPMorgan Chase Bank

The Securities and Exchange Commission announced the awards but did not offer any details of the case. However, lawyers for one whistleblower revealed it involved a 2015 $267 million settlement with the bank.

JPMorgan Chase Bank advisors invested clients’ money in JPMorgan hedge funds and mutual funds without properly disclosing the conflicts of interest, According to the 2015 settlement, some of the funds produced less revenue than other investments.

In an announcement of the award, Jane Norberg, head of SEC’s whistleblower program, wrote that insiders can “be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets.”

One whistleblower won $13 million and the other received $37  million. The SEC announcement noted that the latter award was the third-highest award to date after the $50 million March 2018 award and a September 2018  $39 million award.


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SEC Whistleblower RewardsOn Wednesday, December 12, 2018, National Whistleblower Center (NWC) Executive Director Stephen M. Kohn made a formal presentation to representatives from the U.S. Securities and Exchange Commission (“SEC”) opposing the proposed SEC rule  limiting awards in major fraud cases.  Kohn was joined by NWC Policy Counsel Maya Efrati and NWC Legal Fellow Sarah Khan. The packed room included SEC leadership from the Office of General Counsel, the SEC Whistleblower Office and the Office of the Chairman of the Commission. The meeting lasted for over one hour.
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SEC-Building-DCThe Securities and Exchange Commission’s (SEC) recently published its annual report on the SEC Whistleblower program. According to the report, in 2018 the SEC paid the largest amount of whistleblower awards in the program’s history, with payouts totaling $168 million. This year the SEC whistleblower program also gave its largest whistleblower award to date, $84 million. Many of those receiving the reward were company outsiders and non-U.S. residents.
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