Tags: whistleblower | award | SEC | Madoff

WSJ: Bank Whistleblowers Poised to Collect $100 Million Award

WSJ: Bank Whistleblowers Poised to Collect $100 Million Award

Independent financial fraud investigator Harry Markopolos in 2009 testified before the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises subcommittee hearing on the Bernie Madoff scandal. (AP Photo/Susan Walsh)

By    |   Wednesday, 10 August 2016 12:45 PM EDT

Harry Markopolos, a forensic accountant whose warnings about Bernard Madoff’s $50 billion scheme to defraud investors was ignored by government agencies, may get a cash award for helping federal authorities uncover bank abuses.

The U.S. government’s settlements with custody banks State Street Corp. and Bank of New York Mellon Corp. may result in a whistleblower awards of $100 million to three former employees who provided information to investigators, according to an analysis by The Wall Street Journal.

Markopolos advised the three employees and may share in the award, unnamed sources told the newspaper. They helped the Securities and Exchange Commission and the Justice Department to determine how State Street and BNY Mellon were secretly screwing clients.

“Last month, State Street agreed to pay $530 million to settle civil claims it misled mutual funds and other custody clients with hidden markups to foreign-currency trades,” the WSJ reports. “The agreement follows a $714 million civil settlement BNY Mellon reached last year to resolve accusations it cheated government pension funds and other investors on currency trades for more than a decade.”

As part of the settlements, the custody banks admitted to wrongdoing. Banks, corporations and money managers rely on custody banks for accounting services and administrative functions.

The SEC’s award program allows whistleblowers to collect between 10 percent and 30 percent of penalties the government collects.

That means Grant Wilson, a trader at BNY Mellon’s Pittsburgh office who supplied information to the feds, may be eligible for an award of $60 million, according to the WSJ.

Peter Cera and Ryan Gagne, two former employees at State Street, could claim more than $90 million combined.

The possible cash payouts have led more people to come forward with tips on bad behavior. The SEC said it received about 4,000 tips last year. Since 2011, 32 whistleblowers have collected about $85 million, according to the agency.

 

 

 

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StreetTalk
Harry Markopolos, a forensic accountant whose warnings about Bernard Madoff's $50 billion scheme to defraud investors was ignored by government agencies, may get a cash award for helping federal authorities uncover bank abuses.
whistleblower, award, SEC, Madoff
311
2016-45-10
Wednesday, 10 August 2016 12:45 PM
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