If you ever suffer from insomnia, visit the Federal Reserve Bank’s speech page. Useful to economists, much of what comes out of the NY Fed is highly technical and difficult to understand.
The President of the New York Federal Reserve Bank, William Dudley, is one of the most powerful men in America. He is also usually very circumspect in his words. Last November was an exception to Dudley’s usual low key view on the financial industry. On November 7th in a speech to the Global Economic Policy Forum regarding America’s “Too Big to Fail” banks, Dudley acknowledged the “important problem evident within some large financial institutions—the apparent lack of respect for law, regulation and the public trust.”
Strong words for the head of the Federal Reserve Bank in New York. He had more to say, however.
Dudley in the same speech acknowledged the “apparent lack of respect for law, regulation and public trust.”
Dudley is obviously correct, if a bit understated in his words. The lack of respect for the rule of law is more than apparent. It is rampant in our opinion. That is why so many whistleblowers are finally beginning to come forward.
Although we frequently talk to men and women within Wall Street and the banking industry, many have been reluctant to come forward. We live in a society that worships money and power. And the folks at Bank of America, Goldman Sachs, Wells Fargo and other big “too big to fail” institutions seem to have both.
Times are changing, however. More and more people are coming forward as whistleblowers. Tired of the fraud, corruption and betrayal of both the American taxpayers and the rule of law, folks within these institutions are coming forward in record numbers. And its not just middle managers and technical staff. We are seeing folks well ensconced in the power hierarchy also come forward.
Under the federal False Claims Act, persons with information about fraud against the government or a government funded program are eligible to receive a cash award for their information. The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) also pays awards as well.
A government program can include banks that wrote loans backed by the FHA, Freddie Mac or Fannie Mae or banks that mismanaged TARP funds. The FIRREA statute is much broader in what type information qualifies for an award.
Both whistleblower programs rely on original source information. That often means present and former employees, accountants and vendors have the best information. Under the False Claims Act, whistleblowers can receive up to 30% of whatever the government collects. FIRREA, however, caps awards at $1.6 million.
To qualify for the maximum award, we recommend just three things; be an original source of the information, the information must relate to a government program or potential harm to a federally insured bank and have a great whistleblower lawyer.
Although anyone can seek an award, the False Claims Act requires the filing of a lawsuit under seal in federal court and extensive disclosures. A good whistleblower attorney often means the difference between a big recovery and no award whatsoever.
For more information, contact attorney Brian Mahany at or by telephone at (direct). Our whistleblower lawyers have handled some of the largest cases in the United States including the $2.4 billion case against Allied Home Mortgage.