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Will Whistleblower Protections Suffer at Hands of Rep. Michael Grimm “Reaper” (R-NY)?

Posted by Larry Doyle on February 7, 2012 11:14 AM |

Representative Michael Grimm (R-NY) was ceremoniously inducted into the Sense on Cents Hall of Shame in May 2011. Not that I ever believed there was reason to doubt his induction, but recently I witnessed further reason to cement his status in the elevated ranks of shame.

As regular readers are fully aware, I write passionately about pursuing the truth while promoting investor education and investor protection. The history of the last few years has shown that the financial services industry has not exactly shared our passion.

Who has shared the passion and took very real professional risk in the process? Numerous and sundry whistleblowers. 

Not that each and every whistleblower possesses the keys to unlock every instance of corporate malfeasance, but in my experience I have learned that whistleblowers display remarkable courage while taking real professional risk. They deserve our admiration, gratitude, and protection.

Are we to be so naive to think that Wall Street banks will provide whistleblowers that admiration, gratitude, and protection? Are you kidding me? Let’s navigate this dark and winding road along our economic landscape.

Against this backdrop, I write about the efforts of our aforementioned Congressman from New York, Michael Grimm, who continues to do the bidding for the large Wall Street banks. How so? As the Project on Government Oversight recently highlighted in writing, Guard Whistleblower Protections from Wall Street:

It’s the old bait and switch again. Name a bill the exact opposite of what it actually does to try and sneak it through. This time it’s the Whistleblower Improvement Act (H.R. 2483), introduced by Rep. Michael Grimm (R-NY), that is designed to dismantle current financial sector whistleblower rights and protections.

We’ve been fighting to keep whistleblower protections strong, but now Grimm’s bill is receiving support from Wall Street and a new “shoe-leather lobbying campaign” from the U.S. Chamber of Commerce.

Grimm’s bill would severely undermine the fledgling whistleblower programs at major financial regulatory institutions such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Industry whistleblowers reporting wrongdoing to the SEC and CFTC are one of the best ways to catch the future Madoffs and Enrons.

Under the proposed bill, whistleblowers would be required to report problems internally before going to outside regulators—this would be like requiring police officers to tip off suspects before they begin an investigation. The bill would also deny many would-be whistleblowers the right to a financial reward for reporting wrongdoing, a key incentive to get insiders to come forward.

Wrapping these destructive policies in the guise of protecting whistleblowers is a cruel joke to all the whistleblowers who risked their careers and livelihoods to report wrongdoing and save investors billions of dollars.

Don’t let Rep. Grimm and big-moneyed lobbyists overpower the whistleblower community. Make your voice heard so lawbreaking companies don’t escape accountability.

Whom do you trust to provide real investor protection? A self-regulated financial services industry having a track record in this realm which would make anybody blush? Or would you like to see individuals such as Harry Markopolos, Sherron Watkins of Enron fame, and MANY more be given the protections necessary to allow them to come forward?

Do you want to cast your vote with Mr. Grimm “Reaper” or the Project on Government Oversight?

Sense on Cents compels us to support POGO and call out Representative Grimm for once again displaying the qualities which strike me as endemic to those engaged in the Wall Street-Washington Incest and got him inducted into our Hall of Shame in the first place.

Sense on Cents will continue to monitor this proposed legislation closely in the hopes that we can reap real protection for financial whistleblowers everywhere.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

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