[Ed. Note: The following is a guest post from noted whistleblower Joseph Collins. Ordinarily we don’t accept guest posts. Joe wrote the following as a letter to the editor of the Wall Street Journal. When they did not publish, he asked us to publish. The opinions expressed below are Joe’s.
While we do know that Joe and some of the folks named in his letter have suffered retaliation (e.g. Michael Winston), we also know that anti-retaliation laws have been vigorously enforced in many cases. Until there are no victims, however, we agree with Joe that more needs to be done.]
Ameriprise Financial, Inc. Denies Its Own Whistleblower Policy
At a time when we should be listening to and protecting our whistleblowers, another financial services company should heed the call to account and listen when a judge says “explain yourself.”
For most reading this [post] the events surrounding the 2008 market crisis – or “disaster” as I like to call it— are distant memories. For others, those events are fresh wounds that never properly healed.
The names of well-known whistleblowers still linger to some of us. Roger Boisjoly (—the Challenger disaster), Sharon Watkins (Enron), Cynthia Cooper(Worldcom), James Holzrichter(Northrup Grumman), Gary Aguirre, Bill Black, Richard Bowen, Michael Loscalso, Michael Winston and the list goes on. They are all good men and women who sacrificed their careers, livelihood, health and family to “commit the truth.” All were severely punished and all bear the scars of the retaliation.
One would think that corporate managers would get the message. If you mess with a whistleblower you’ll pay the price. Apparently some never got the memo or, if they did, they ignored it completely.
Take the case of Collins v. Ameriprise. Joe Collins, a former Series 7 licensed broker and financial advisor with 11 years of experience reported several cases of suspected violations of FINRA rules and securities laws. He reported that his company didn’t pay taxes in Texas for years. He reported that clients had been put in WRAP accounts and their funds left there for years — with the wrap fees going to branch managers.
During the early days of the stock market crisis in September 2008 Collins alleged that Ameriprise was misleading clients and stockholders about their exposure to Reserve Primary Fund, – the money market fund that “broke a buck.” He went to his compliance officers, Field Vice President, FBI, SEC, FINRA, Inc., Texas State Securities Board and his Congressman. All of his reports fell on deaf ears (although the company did finally pay its taxes in Texas). In return he was investigated and charged with Sales Practice Violations. He would have been terminated had he not terminated the company first “for cause.”
After seven years of wrangling through the FINRA Arbitration/ Mediation/ Frustration process and not one but two OSHA investigations, Collins has finally arrived at a real court before a real judge. [H]e finally found a judge at the Department of Labors’ Office of Administrative Law Judges who would listen.
In response to Collins’ initial allegations, Ameriprise issued this response:
“Contrary to Claimants contention, the Supreme Court did not hold in Lawson et.al. v. FMR LLC that independent contractors were protected by 18 USCA§1514A(a). The issue in that case was whether SOX protected only employees of public companies and not employees of contractors or private companies that provided services to the public companies. The court held that employees of independent contractors could bring claims under the statute. Nowhere in that decision did the Supreme Court state that independent contractors themselves could bring such a claim.”
Let me see if I have this right- SOX covers some independent contractors – just not the ones who work for Ameriprise. Really?
Ameriprise neglected to mention its own internal whistleblower retaliation policy covered it advisors who are “independent contractors.” The company also forgot to look at its franchise agreement that did not allow its advisors to hold their practice within a corporate structure. Oops.
The head of the audit committee also acknowledged that the company was aware of the whistleblower complaint (for how long is unknown) and were looking into it.
Integrity is a bigger thing than telling the truth. It is about being a certain kind of person. It is about being people who know who we are and what we are, and it is about being true to what we are even when it could cost us more than we should like to pay. (Lewis Smedes from The Crucible)
The U.S. has 22 whistleblower laws designed to protect whistleblowers in manufacturing, food safety, transportation, government contracts, and financial services. Each of these laws were carefully designed to “protect the whistleblower.” In reality, however, the laws don’t promote much more than crime scene investigations as the whistleblower has flat lined and the retaliators getting the “jump-start” bonuses.
We, as a country, should be bigger than this.