John F. Kennedy once quoted Dante: “The hottest places in hell are reserved for those who, in times of great moral crisis, maintain their neutrality.” Unfortunately, on Wall Street, maintaining neutrality — or feigned ignorance — is often rewarded, whereas speaking out is punished.
The 2010 Dodd-Frank Act rights this wrong by incentivizing whistleblowers with money in return for their honorable deeds. The Securities and Exchange Commission (SEC) Office of the Whistleblower compensates with between 10 and 30 percent of the money collected based on the original information provided. In addition, the law is meant to protect the whistleblower from retaliation by her or his employer.
Many financial whistleblowers have, nonetheless, been shunned by the industry they sought to clean up. Compounding the problem, financial industry whistleblowers and SEC insiders have criticized the agency for ignoring the unlawful acts of the most powerful Wall Street executives while going after the small fry.
Retired SEC trial attorney James Kidney described the SEC as tentative and fearful about addressing allegations of wrongdoing on Wall Street. Mr. Kidney made the analogy that the agency “polices the broken windows on the street level and rarely goes to the penthouse floors.”
Even Mr. Kidney was pushed to the sidelines when he attempted to pursue more senior executives at Goldman Sachs in the SEC’s 2010 investigation of sub-prime mortgage failures. When he was given a lesser role in the probe, Mr. Kidney quit the investigative team. He had become a victim of the same type of whistleblower discrimination that he sought to investigate.
In exclusive interviews and a TV documentary, PBS Frontline chronicles the injustice in the financial sector, including the following:
Do not remain neutral if you suspect unlawful activity at your financial institution. Consult a whistleblower rights lawyer in Texas who can aggressively protect your right to speak out against injustice.