Five years have passed since Lehman Brothers’ bankruptcy. Richard M. Bowen III, a former Citigroup executive who blew the whistle on their bad business practices, provided 1000 pages of documents to the Securities and Exchange Commission (SEC) and 28 pages of testimony to the Financial Crisis Inquiry Commission (FCIC). Nevertheless, Bowen’s voice has not been heard because of alleged cover-up and censorship.
The facts according to Bowen
Bowen described how Citigroup was purchasing tens of billions of dollars in risky mortgages, repackaging them and selling them as investments. Attempting to be a team player, Bowen sent an email in November 2007 to Citigroup executives notifying them of internal breakdowns and possible financial losses. He received a response from a Citigroup attorney telling him that they will respond to his allegations and that there is no need to continue corresponding. Bowen sent additional emails to the attorney and never heard an answer. In 2008, Bowen’s role was significantly downsized. In January 2009, Citigroup officially terminated its relationship with Bowen.
Whistleblowing to the SEC
After Bowen’s responsibilities were reduced in 2008, he decided to blow the whistle on Citigroup to the Occupational Safety and Health Administration under the Sarbanes-Oxley Act. The complaint was settled as part of his separation agreement with Citigroup.
Meanwhile, in July, Bowen went to the Securities and Exchange Commission to testify about Citigroup’s dangerous business practices. After handing over more than 1,000 pages of documents, Bowen never heard a response from the SEC.
The deafening sound of silence
After testifying to the SEC and giving them 1000 pages of supporting documents, Bowen received the response that they would pursue his claim. Not only did the SEC not do anything, but they locked up his file. Repeated requests under the Freedom of Information Act for access to his file have been denied.
In May 2009, Congress created the 10-member FCIC to analyze the causes of the U.S. financial crisis. Bowen, upon invitation, addressed the committee and told them his story. One week after giving 28 pages of testimony, one of Bowen’s attorneys was informed by the FCIC that they want Bowen to make substantial changes to his testimony. They warned that if alterations are not made, Citi will make war with him and the FCIC. After contemplating the situation, Bowen made the recommended changes to his testimony.
Members of the FCIC have subsequently denied applying any pressure on Bowen to change his testimony.
Blowing the whistle on any company’s malfeasance is a dangerous task that often involves retaliation by the employer. An experienced Dallas whistleblowing attorney can guide you through the entire process to protect your interests.