Blowing the Whistle and Nobody Hears
- posted: Aug. 19, 2013
- Employee Rights
When a person assumes the role of a whistleblower to stop the illegal and fraudulent activity of a corporation or governmental agency, it is understood that there may be harsh retaliatory acts taken by the violating organization. One reaction that the whistleblower does not expect is the deafening silence that many hear when they report their claims.
SEC has a history of silence
In 2012, the Securities and Exchange Commission’s (SEC) whistleblower program received 3,001 tips and issued only one tipster award. In fact, the SEC has a history of not responding to complaints. Broker Leyla Wydler delivered a letter to the SEC in 2003 complaining about her former employer, the Stanford Financial Group. In 2002, Stanford terminated Wydler for refusing to sell financial products that Stanford Financial knew was misleading to investors.
Wydler never heard from the SEC. In 2004, Wydler called the local Fort Worth, Texas office. An employee heard the report, but no follow-up occurred. Four-years later, Stanford was caught running a $7 billion Ponzi scheme.
Harry Markopolos, a Chartered Financial Analyst and Certified Fraud Examiner led a team of three other investigators who spent nine years attempting to notify the SEC about a Ponzi scheme led by Bernie Madoff. Markopolos claims that the SEC had all the information about Madoff's scheme years before the scheme collapsed.
The law does not provide for speedy responses
The Tax Relief and Health Care Act of 2006 created a new framework for the consideration of whistleblower submissions and opened a Whistleblower Office within the Internal Revenue Service. Similarly, the Dodd-Frank Act created the Office of the Whistleblower for the SEC. Like the IRS program, the law merely establishes a framework and system to receive complaints of violation and bring claims. Even with a director, eight attorneys and three paralegals, the OWB has been extremely slow in investigating complaints. In 2012, the agency only issued one award to one whistleblower.
The future need not be silent
When reviewing the success of the biggest whisteblowers, take notice of the efforts necessary to get the relevant agency to respond. A Texas whistleblower attorney can help you file a claim and be heard.
