Whistle while you work on Wall Street
Last year President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, a provision of which allows the U.S. Securities and Exchange Commission to pay out as much as 30 percent of the recovered money to people – employees, ex-wives, etc. - who provide evidence of fraudulent activity. The purpose of the Whistleblower Bounty Program is to reduce the risk of future Bernie Madoffs and prevent the likes of employees at the now defunct mortgage company, Ameriquest, who doctored mortgage applications. Largely unregulated, the business of subprime-mortgage-backed securities helped to inflate the housing bubble of the last decade, and excessive risk-taking by the Wall Street banks also contributed to the need for a taxpayer-funded bailout of $700 billion in September of 2008. The debate about how to regulate the financial services industry continues as we advance our economy past the Great Recession. Enforcement officers at the S.E.C. still have creases to iron out in the proposed whistleblower program, while securities-fraud lawyers, like Stuart Meissner, have already filed several pending law suits under the Dodd-Frank law. One side of the Whistleblower debate wants to make it easier for people to come forward with information, and reward those people with cash-in-hand for doing so. The other side wants to make sure that companies can maintain their “corporate integrity programs,” such as internal compliance measures. Today, we discuss the new meaning of “whistle while you work” on Wall Street.