The Era of the Whistleblower is in.
In a large case alleging that military veterans and Joe Taxpayer were defrauded out of millions, JPMorgan Chase became the first bank to settle with the federal government. The Bank has agreed to pay $45 million, and the other defendant banks—you may have heard of Bank of America, Citi, Washington Mutual, and Wells Fargo, among others—continue to fight the case in court.
The whistleblowers, two unnamed mortgage brokers with consciences, are the latest to heroically point out wrongdoing by large companies. As Main Street knows all too well, life is often too busy to read every bit of fine print, scrutinize every line of every bill, put dinner on the table, and get the kids to their baseball games. When something has to go, often it’s the scrutiny.
In this case, the banks did what we’ve come to expect: ruthlessly and illegally capitalized on that fact of life. That is, until these two whistleblowers bravely stepped forward to the aide of veterans and taxpayers, risking their jobs and professional reputations. And they will be handsomely rewarded for their efforts, to the tune of over $10 million—big money, but tiny in comparison to the service they provided Main Street.
I have written about the winds of change against consumers; well, whistleblowers sit on the other side of the seesaw, opposite Wall Street and its heavy pockets of greed. Whistleblowers are Main Street’s hope to balance out the political and legal power courts continue to imbue upon corporations and banks—think of little Frodo Baggins taking on all the world’s evil in the Lord of the Rings series. But the list of successful, high-profile whistleblower actions seems to lengthen every week:
- Cheryl Eckard blew the whistle on Glaxo-SmithKline’s horrifically inconsistent drug production practices, saving countless lives in doing so;
- Michael Winston refused to be a corporate yes-man for Countrywide and won a $3.8 million settlement for wrongful termination related to his whistleblowing efforts;
- Long before old Bernie was caught, Harry Markopolos provided information to the SEC from numerous whistleblowers on Madoff’s actions. His allegations were ignored, but nonetheless whistleblowers had identified the world’s largest Ponzi operator years before the authorities succeeded in doing so; and
- Sherry Hunt’s information led to a $153 million settlement with Citibank due to improper mortgage scrutiny.
And now, over a half-dozen banks are implicated in this case based on information provided by two still-anonymous mortgage brokers. It seems the additions to whistleblower statutes, including enhanced incentives related to the Dodd-Frank bill, have encouraged whistleblowers to step forward and feel safe exposing wrongdoings.
It is tough being the little guy in the fight, and consumers are certainly that. But perhaps we are just realizing our slingshot in this David versus Goliath struggle for fairness—whistleblowers. And they are also realizing themselves.
Assisted by David T. Martin