Will the Wells Fargo fraudulent account scandal lead to more whistleblower legislation? That is one question The Man From FCPA has been considering in the wake of this ever-burgeoning imbroglio. While the bank’s CEO John Stumpf has consistently appeared as the CEO who couldn’t shoot straight in his testimony before both Senate and House committees looking into the scandal, there may well be other effects for the banking industry in other areas going forward.
One thing that is abundantly clear, even at this early stage, was that internal reporting did absolutely no good to stop illegal and unethical conduct within Wells Fargo. Several whistleblowers have publicly come forward to report they were terminated after going through the appropriate procedures of reporting to their superiors, HR, and eventually calling the company internal hotline. One response to this shameful treatment of employees who were trying to do the right think has been suggested by Jordan Thomas, well-known whistleblower counsel and head of whistleblower representation practice at the law firm of Labaton Sucharow.
In an op-ed piece in the New York Times, Thomas noted that “banking regulators either have no whistleblower programs that provide incentives and protections for individuals to break their silence about wrongdoing they witness, or these regulators have little-known programs with comically small awards.” Thomas contrasts this situation with the SEC whistleblower program created under the Dodd-Frank Act for issuers.
SEC Chairperson Mary Jo White has called the SEC program a “game changer” and the program recently exceeded over $100 million in payouts to whistleblowers. With the success of the SEC program and the sordid treatment of Wells Fargo employees who reported the illegal conduct internally, it would seem logical that Congress would enact a program for financial institutions, no matter how hard they push back. The Man From FCPA only wonders how far extending this reach of government payouts for whistleblowers might go.