by Brian Mahany
In yet another chapter in the tales of the banks deemed “too big to fail,” 3 former employees of Deutsche Bank have come forward and accused the banking giant of intentionally hiding billions of dollars of trading losses from regulators. During the height of the financial crisis, the bank’s CEO was quoted as saying the bank had billions of dollars of reserve capital. According to the 3 whistleblowers, the bank was hiding a highly over leveraged portfolio of derivatives; a portfolio that could have easily caused the bank to fail and many investors (including some pension plans) to lose their investments.
According to one of the whistleblowers, “if Deutsche had marked their books they might have been in the same position as Lehman” meaning had they performed a proper accounting they likely would have been declared insolvent.
According to a published report in the Financial Times, at least one of the whistleblowers was terminated after confronting senior bank officials.
The 3 whistleblowers have filed claims with the Securities and Exchange Commission. The SEC operates a whistleblower program that pays awards to people with information about fraud and improper reporting in publicly held companies. The awards are a percentage of what the government collects in fines and penalties. Other government whistleblower programs include monies for reporting tax cheats (administered by the IRS), the federal false claims act (fraud against the government and taxpayers) and FIRREA, the Financial Institutions Reform, Recovery and Enforcement Act (bank fraud program).
To qualify for an award, you generally must have non-public information and must be first to report. If you are reading about a fraud in a newspaper and have no independent knowledge, you probably can’t receive an award. Most whistle blowers are former employees, vendors or consultants of the companies they report.
If you believe you have information about a fraud in the banking or business world or know a company /person cheating on their taxes, give us a call. We represent the whistleblower in the largest false claims act case pending in the U.S. – HUD’s $2.4 billion claims against Allied Home Mortgage. Large or small, we can help you qualify for your award.
Mahany & Ertl – America’s Fraud Lawyers, Proudly Representing Whistleblowers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many jurisdictions.