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Protecting Whistleblowers since 1977

Landmark Financial Whistleblower Legislation Introduced in Senate and House

Shanna Devine, February 25, 2016

The whistleblower rights community owes deep thanks to Ranking Member Elijah Cummings (D-MD) and Senator Tammy Baldwin (D-WI) for introducing the Whistleblower Augmented Reward and Non-Retaliation Act of 2016 (WARN Act). This gold standard whistleblower protection bill would provide badly needed teeth in anti-retaliation rights for those who challenge bank fraud. Specifically, it would:

  • Upgrade all financial whistleblower laws to best practice standards, while eliminating vague or contradictory language that has confused the courts;
  • Modernize and expand protection against increasingly aggressive gag orders and other tactics to silence financial whistleblowers and even deprive them of counsel;
  • Expand the scope and strength of  whistleblowing rights  and anti-retaliation remedies; Cancel the SEC’s discretion to arbitrarily reduce or withdraw whistleblower awards due to reasonable delays in filing a disclosure;
  • and Remove outdated or arbitrary limits on whistleblower rewards.

In a letter to leadership of the House Oversight and Government Reform Committee, GAP and a diverse group of organizations applauded introduction of the WARN Act and urged its swift passage -

As agencies with limited resources continue to prosecute Wall Street fraud tied to the 2008 financial crisis, and to probe abusive banking activities that could fuel the next crisis, the government needs all the help it can get from insiders with firsthand knowledge of corporate malfeasance. The WARN Act provides much-needed incentives and protections to industry whistleblowers, and would go a long way toward restoring public confidence in the government’s oversight of Wall Street. We urge you to pass this important legislation without delay.

This bill could not be timelier, given the trend of increased rates and severity of whistleblower retaliation in the financial industry.

An Ethics Resource Center study found that the number of employees who reported misconduct and faced retaliation nearly doubled from 2007 to 2012. More than a third who remained silent observers cited fear of retaliation as the reason.

The WARN Act would also benefit corporations, by strengthening internal reporting mechanisms. More than 90% of whistleblowers attempt to disclose the fraud they witness to their employer, and studies have shown that internal reporting is more effective to fight fraud against corporations than audits, compliance programs and law enforcement combined.

Take the case of Richard Bowen, a former Citigroup Senior Executive. In 2011, 60 Minutes aired a major expose of his whistleblowing disclosures.  Today he no longer works at Citigroup.

Mr. Bowen’s experience embodies the stakes for this bill. Its stronger rights would have given him a fighting chance to maintain his career.  Moreover, its anti-gag provisions would give banking employees the right to blow the whistle after losing their jobs.

Whistleblowers take grave risks by exercising the freedom to warn. Today banks have the freedom to gag even departed employees and further isolate the public from information they need to know.

The WARN Act is a much-needed makeover to modernize primitive laws, establish consistent legal rights, and address lessons learned from recent experience. This is good government legislation at its best.                 

The full letter can be viewed here

Signatories include:

Americans for Financial Reform

ACORN8

Bank Whistleblowers United

Bill of Rights Defense Committee/Defending Dissent Foundation

Demand Progress

Drum Majors for Truth

Gordon Hamel (White House Whistleblower)

Government Accountability Project

International Association of Whistleblowers

Mehri & Skalet PLLC

National Forum On Judicial Accountability

National Whistleblower Center

OAK (Organizations Associating for the Kind of Change America Really Needs)

OpenTheGovernment.org

Plea for Justice Program

Power Over Poverty Under Laws of America Restored (POPULAR)

Project On Government Oversight

Public Citizen

Taxpayers Protection Alliance

United Support and Memorial for Workplace Fatalities

Whistleblower and Source Protection Program (WHISPeR)