New Source: JusticeNewsFlash.com
09/27/2013 // Whistleblower Law Firm (Press Release) // Keller Grover, LLP // (press release)
In the wake of the global economic downturn, regulators, shareholders, and the public at large are all casting a watchful eye on financial institutions. Their goal: to ensure that fraud and other improper behavior — all-too-prevalent in recent years — is exposed, and stamped out. Yet the task is made difficult by the complexity of much financial wrongdoing. Here is where whistleblowers — insiders with unique and valuable knowledge of bad behavior — can play a vital role.
Financial fraud can take many forms, as recent cases have demonstrated. In the past year, much attention has been focused on the government’s crackdown on insider trading, and on matters like the ‘London Whale’ case, in which two former employees at JPMorgan Chase are accused of crimes — including conspiracy and wire fraud — in conjunction with the bank’s $6 billion loss in credit default swaps in 2012. But other instances of financial fraud, including improper stock option ‘backdating’ and banks not following proper procedures in administering government-backed loans, have also been a source of concern.
While the cases may be different, ever fraud case has one thing in common: complexity. Unraveling financial fraud can be a challenge for even the best investigators and prosecutors. Yet insider knowledge — getting the full story from one who was there — can help develop a narrative of what went wrong, and bring about recovery and justice. This is the role whistleblowers play, and as the crackdown on financial fraud continues, it will be an increasingly important one.
“When insiders speak out about the bad behavior they’ve witnessed, they are doing both a courageous and necessary thing,” says Jeffrey F. Keller, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a veteran whistleblower lawyer. “Inside information is the key to unraveling fraud because it helps create an accurate, credible, often vivid account about what occurred. If we are going to keep fighting — and beating — fraud, we need more insiders to come forward and sound the alarm.”
When the victim of the fraud is the government, whistleblowers cannot just help to right a wrong, they also have a financial incentive for coming forward. Key whistleblower statutes like the federal False Claims Act provide that insiders who assist in successful prosecutions are entitled to a share of any ultimate recovery. Since the False Claims Act was substantially modified in the 1980s, the recoveries it has made possible have exceeded $34 billion — with many multimillion-dollar awards going to whistleblowers.
“What a whistleblower is doing in exposing fraud on the government is important, and legislators have recognized that in awarding them a share of the recovery,” says Keller, whose firm has whistleblower offices in Los Angeles and San Francisco. “Many state statutes that emulate the False Claims Act provide financial incentives, as well, as do whistleblower programs that have been created by agencies like the Internal Revenue Service and the Securities and Exchange Commission.”
Crime, the old saying goes, doesn’t pay. But helping to unveil crime can — on many levels.
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