In any other industry you have to be happy to not get your life ruined as whistle-blower but in banking we again have to give them a huge amount of money to do something. It really bothers me. Why do we have to give millions of dollars? Anywhere else you would get a small reward or nothing.
SEC Announces Its Largest-Ever Whistleblower Awards
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Re: SEC Announces Its Largest-Ever Whistleblower Awards
#22While I appreciate a criminal getting caught, these types of systems that incentives private citizens spying and reporting on one another are bothersome on many levels.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#23Interesting to see the SEC finally grow some teeth, between the recent ICO enforcement actions, Theranos penalty, and now this. When I was in financial software (06-07) they were basically a joke; my employer had developed some software to help enforce a (relatively obscure) regulation and tried to sell it to them, and they were completely indifferent. Kind of a welcome change, if they manage to get people to be more…
> When I was in financial software (06-07) they were basically a joke
Not unrelated, as a major reason these laws are now getting enforced is because people started violating them brazenly enough that it's become very profitable to enforce them.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#24In any other industry you have to be happy to not get your life ruined as whistle-blower but in banking we again have to give them a huge amount of money to do something. It really bothers me. Why do we have to give millions of dollars? Anywhere else you would get a small reward or nothing.
It seems this is an argument for greater rewards for whistleblowers in other industries - not one for decreasing financial whistleblower rewards.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#25In any other industry you have to be happy to not get your life ruined as whistle-blower but in banking we again have to give them a huge amount of money to do something. It really bothers me. Why do we have to give millions of dollars? Anywhere else you would get a small reward or nothing.
Because if you blow the whistle you will never work in that industry again.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#26Whistleblowing can be it's own business model, just do a google search for Ven-a-care. Ven-a-care is a small pharmacy down in the Florida Keys. A few decades ago, it started to notice that the price it was paying for certain drug was very different from what the gov't thought they cost. Gov't price reporting is incredibly strict in pharma due to past mucking with the numbers. So they started a lawsuit which was picke…
Bradley Birkenfeld did quite well whistleblowing on UBS [1]. $104m. https://en.wikipedia.org/wiki/Bradley_Birkenfeld#Whistleblow...
Considering many of these people end up blacklisted from their industry, we as a society kind of owe it to them.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#27While I appreciate a criminal getting caught, these types of systems that incentives private citizens spying and reporting on one another are bothersome on many levels.
At the same time, we want whistleblowers, to expose wrongdoing by companies that otherwise would not be caught. And considering that many of them end up blacklisted by their industry, we kinda owe them something, so that they don't end up on the street due to doing the right thing.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#28While I appreciate a criminal getting caught, these types of systems that incentives private citizens spying and reporting on one another are bothersome on many levels.
Why does it bother you? Do you equate it with some sort subset of McCarthyism - i.e. turning the government loose on your neighbor, etc.? To me, it's more of a "see something, say something" deal. But the issue with that is that there is a substantial personal risk to doing so when one works in the industry and usually the employer they are blowing the whistle on. That means they run the risk of destroying their career (because most firms in their field will hot hire them after that)...all for "doing the right thing". That's why I think it's OK to have this incentived. There is substantial personal risk to them. It's not like reporting a suspicious bag at the airport.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#29Earlier quoted context omitted.
"When I was in financial software (06-07) they were basically a joke" I spent a few weeks causally reading testimony transcripts from the Madoff investigation when these were published by the SEC. The SEC was far worse than a joke. The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their pa…
> The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their participation in the fiction. This doesn't sound right at all, the SEC doesn't conduct audits. See, for example, [1]. [1] Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme - Public Version https://www.sec.…
"the SEC doesn't conduct audits"
Poor terminology on my part I believe. The term used in the report is "examination." SEC staff, including Sollazzo, Lamore, Ostrow, Nee (mentioned in the report you cite) conducted on-site examinations of Madoff's operations. Similar events occurred with Madoff at least four times with over a period of about 20 years.
I'm having trouble locating the actual transcripts now[1]; they appear to have disappeared into the memory hole. At one time the mass of raw PDF files were available from the SEC website. I recall very specific testimony from these examiners including details such as the type and locations of the offices provided for examiners by Madoff, recollections of in person meetings in Madoff's office and details about the physical files involved.
The results of these 'examinations' were cited by Madoff to establish credibility with investors.
[1] Here they are: https://www.sec.gov/news/studies/2009/oig-509/oig-509_exhibi...
Here is an SEC staff accountant discussing documents received from Madoff: https://www.sec.gov/news/studies/2009/oig-509/exhibit-0262.p...
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#30In any other industry you have to be happy to not get your life ruined as whistle-blower but in banking we again have to give them a huge amount of money to do something. It really bothers me. Why do we have to give millions of dollars? Anywhere else you would get a small reward or nothing.
It seems this is an argument for greater rewards for whistleblowers in other industries - not one for decreasing financial whistleblower rewards.
But this is never going to happen so let's reduce it for bankers. With these sums they incentivize people to participate in shady stuff and then cash out by jumping ship on time.