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SEC Accused of Mishandling Whistleblower Claim Regarding Financial Misconduct at Deutsche Bank

The economy has come a long way since the financial crisis of the late 2000s. However, the fallout for the big banks and discussions of how the federal government should regulate them continues.

One whistleblower accused a senior Securities and Exchange Commission (SEC) official during the financial crisis of mishandling a tip he sent in alleging financial misconduct on the part of Deutsche Bank. The case is making its way through the U.S. Court of Appeals for the Second Circuit. The unnamed plaintiff claims that official, Reid Muoio, of failing to pass along information about how the bank was routinely mis-valuing the various types of subprime mortgage packages that played a major role in causing the global recession. As such, the whistleblower says he was unable to collect what would have been a large whistleblower award.

Deutsche Bank later paid $55 million in civil fines to settle claims it misled investors with regard to its subprime mortgages, with two former employers each getting compensated for assisting the SEC. The claimant in this case says he was unaware of how his tip was handled until after he was denied an award and launched an appeal into the SEC’s decision.

The SEC claims Muoio did not find the whistleblower credible.

Whistleblowers must be assertive

While the country has come a long way over the past decade with regard to how it protects and rewards whistleblowers, there is still work to be done in terms of believing whistleblowers and putting them into positions where they do not have to be fearful of their jobs and livelihood.

Therefore, it is critical for whistleblowers to secure legal guidance from skilled attorneys who can help them be assertive and ensure wrongdoing gets met with justice. To learn more, speak with an experienced attorney at Kardell Law Group.

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  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

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