By JORDAN THOMAS
Having served in senior positions at both the Securities and Exchange Commission and the Department of Justice, I know that the many settlements with banks arising out of the financial crisis are not mere “spankings,” but critical, hard-fought victories. But real change requires charging individuals, and not just balance sheets. And to take down the truly bad actors, law enforcement and regulatory authorities need whistle-blowers.
The right to report malfeasance should be an unwaivable right in a democratic state; obstruction of that right is cartel-like conduct.
In 2010, Congress ordered the Securities and Exchange Commission to create a program that allowed anonymous reporting and offered significant employment protections and monetary incentives to eligible whistle-blowers. Since the implementation of the program in 2011, the commission has received a flood of high-quality intelligence and evidence about possible securities violations — often from senior executives who historically have remained silent.
And yet, in my work representing corporate whistle-blowers, I regularly review employment contracts and confidentiality agreements that, among other egregious provisions, seek to prevent individuals from reporting unlawful conduct to the government.
The right to report malfeasance should be an unwaivable right in a democratic state; obstruction of that right is cartel-like conduct. With the Government Accountability Project, I have petitioned the S.E.C. to clarify its rules to guard against corporate attempts to silence, retaliate against or otherwise bully whistle-blowers.
Straightforward policymaking that encourages reports of misconduct, sets forth protocols for internal reporting, and establishes a zero-tolerance policy for retaliation is vital to repairing the integrity of our system.
To meaningfully repair faith in our banks, the financial markets and protect investors, we need to prosecute more of the senior bad actors. Until we do, these hard targets will have little to fear and nothing to lose. Accountability at the top starts from within, and those working inside of the system should feel safe enough to speak up about wrongdoing.