Snitches no longer end up in ditches; they get paid
Snitches get stitches. Unless you're telling the government about possible investment fraud cases, in which case snitches get paaaaaaaaid.
The Securities and Exchange Commission reported Nov. 15 that its Office of the Whistleblower doled out more than $14 million in Fiscal Year 2013 to people who submitted anonymous tips about possible investor fraud cases that led to recovered investor funds.
The office received 3,238 tips in FY 2013, which for the SEC ended Sept. 30. That was up from 3,001 in FY 2012, the first full year of the office’s existence.
Much of that payment went to one particular whistleblower, who was awarded $14 million for information pertaining to an unnamed company that led to the recovery of “substantial” investor funds, according to the report.
It’s a shift in our culture, not just in the financial world but in the country as a whole. People want to stay more informed, they have the tools to stay more informed and they rightly want more input and say on how their money — investment money or tax money — is being handled.
And when it’s not going to the right places, people have been far more willing to speak up and hold people handling that money more accountable.
Many governments — federal, state and local — have responded to that public desire to stay more informed by making their government files and paperwork more accessible electronically. The fact that there even is a federal “Office of the Whistleblower” shows a government commitment to accountability in the financial world.
If you watch the vastly under-appreciated movie “The Insider” and see what famous Big Tobacco whistleblower Jeffrey Wigand (played by Russell Crowe) had to go through to expose how the seven large tobacco companies had been duping the country for years, it wasn’t pretty, even if it was overdramatized for Hollywood. Threats against his family, his livelihood, his life, all coming from the company he worked for. He might not have been able to go to the Office of the Whistleblower, even if it existed at the time, because it wasn’t directly affecting investment fraud.
But you can bet there were corporations watching that movie wondering just how much their employees knew and if they’d be willing to go as far as Wigand did. It wasn’t that troublesome at the time, because those employees had to go really, really far.
Now? Whistleblowers can drop an anonymous email during their lunch break and, within a couple days, SEC investigators could come calling. The Office of the Whistleblower should serve as a deterrent, because it is now so easy to relay the information you know about securities fraud.
Add in the incentive of getting paid for supplying that information — 10 to 30 percent of funds recovered exceeding $1 million — and the office has the potential to be a major tool in fighting investment fraud and making sure the Bernie Madoffs of the world decide on a different career path.