Three Merrill Insiders To Split $83 Million In Largest-Ever Whistleblower Award

Who needs to work when you can just expose your boss' criminal ways and retire with the "whistelblower" proceeds?

That's the question three former Merrill Lynch insiders will ask themselves after their tips led to both a successful enforcement against parent company Bank of America in a $415 million settlement for engaging in complex transactions which allowed the bank to reduce the amount of client funds that had to be set aside in reserve accounts and - more importantly - the largest ever whistleblower award amounting to $83 million.

Two of the recipients will split a $50 million award, while a third person will receive $33 million for a tip in the same case.

The previous record was $30 million in 2014 - all done under an award provision under the post-crisis Dodd-Frank law. 

Jordan Thomas, an attorney with Labaton Sucharow, said he represented the Merrill insiders but declined to name them or say whether they still worked for the Bank of America unit. The three provided information that helped the SEC win a $415 million settlement with the bank in 2016 for engaging in complex transactions to reduce the amount of client funds that had to be set aside in reserve accounts. -Bloomberg

“By coming forward, these courageous executives protected millions of Merrill Lynch’s customers, but their impact is far greater than that,” Thomas said in a statement. “They are a shining example of integrity in action and will inspire others on Wall Street to break their silence.”

A "substantial part" of the award will be donated to charities, said Thomas - who ironically helped develop the SEC's whistleblower program while employed in the agency's enforcement unit. Thomas then launched Labaton Sucharow's division representing tipsters in 2011.

One almost wonders how much Thomas' legal fees will be as a result of a program developed by, well, Thomas.

Naturally, the SEC which will pocket the vast majority of the settlement proceeds, was delighted:

"These awards demonstrate that whistleblowers can provide the SEC with incredibly significant information that enables us to pursue and remedy serious violations that might otherwise go unnoticed," said Jane Norberg, chief of the SEC's whistleblower office. "We hope that these awards encourage others with specific, high-quality information regarding securities laws violations to step forward and report it to the SEC." 

Individuals who provide credible and timely information to the SEC resulting in a successful enforcement action may be able to claim between 10 and 30% of monetary penalties over $1 million.

This in turn has prompted many on Wall Street to ask why work? Just scope out your employer for grossly illegal behavior, report it to the SEC and then retire with the proceeds.

* * *

The 2016 BofA case revolved around violations of the SEC's customer protection rule, whereby Merrill Lynch engaged in a series of trades between 2009 and 2012 which artificially reduced the amount of customer funds required to be set aside,. The transactions "lacked economic substance," which enabled the firm to finance its own trading activities, according to the SEC. 

Meanwhile, while trading on Wall Street is hardly as reputable as it once was, the real future may be in ratting out your boss: since the program began in 2012, over $262 million has been paid to whistleblowers according to the SEC. The identity of whistleblowers and the information they provide are not disclosed by the agency. 

Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act also prohibits retaliation by employers against whistleblowers - who are provided with a private cause of action in the event they are "discharged or discriminated against by their employers in violation of the Act." 

Alternatively...

Comments

JethroBodien VAL THOR Mon, 03/19/2018 - 19:44 Permalink

Any yet no one goes to jail!  Where are the disincentives for the fucking would be criminals.  The United States is completely and utterly captured/finished.  Don't be fooled by "drain the swamp".  It's not happening because the swamp won't allow it.

 

For Trump to prevail he would have to tear down the entire edifice of government and start over but we know that's not going to happen.

 

 

In reply to by VAL THOR

Blankenstein MozartIII Mon, 03/19/2018 - 16:57 Permalink

As long as you can avoid being Arkancided.  

I was going to mention that Eric Braverman has been missing (or out of the public eye) after running the Clinton Foundation, but it appears he has turned up.  He is now heading Eric Schmidt's philanthropies. 

 

"Braverman's name surfaced in the fall when one of the documents stolen from the Democratic Party showed some Clinton staffers believed he had leaked information about the foundation's finances.

Braverman and the Schmidts declined to be interviewed for this story"

 

https://www.bizjournals.com/sanjose/news/2017/01/18/ex-clinton-foundati…

In reply to by MozartIII

enf83 Mon, 03/19/2018 - 15:57 Permalink

In the news

Couple Commits Suicide After Their Parents Tried To Separate them:http://enternations.com/thread/548/couple-commits-after-parents-separate

Man dies while trying to steal from a transformer:http://enternations.com/thread/549/man-dies-trying-steal-transformer

 

Airport staff member get punished for being too handsome: http://enternations.com/thread/528/airport-staff-member-punished-handsome

Girlfriend saves her lover’s life by cutting his throat: http://enternations.com/thread/522/girlfriend-saves-lover-cutting-throat

Woman dies after husband uses mortar bomb as sex toy:http://enternations.com/thread/499/woman-dies-after-husband-mortar

Father Joins Son To Rape His Young Daughter:http://enternations.com/thread/445/father-joins-son-young-daughter

DSCH Mon, 03/19/2018 - 15:57 Permalink

"Courageous executives" haha. More like greedy banksters. Do you think they would have given a shit had the prospect of a multi-million dollar reward not been dangling in front of them?

VAL THOR Mon, 03/19/2018 - 16:08 Permalink

President Trump should offer various financial incentives to anyone blowing the whistle on any govt agency.

Then the rats will be scurrying for cover.

WTFUD Mon, 03/19/2018 - 16:41 Permalink

If you're not going to go to jail then maybe the bosses can set themselves up and share the booty all around. Spread the love, man!

Kickaha Mon, 03/19/2018 - 16:45 Permalink

On one side of this fraud, customers.

On the other side of this fraud, Merrill Lynch.

Justice has been served. 

Customers got no reimbursement whatsoever from what I can tell from reading this article.  All the money goes to .gov and three Merrill Lynch employees.  Oh, and to the plaintiff's lawyer, too.

Radical Marijuana Mon, 03/19/2018 - 16:56 Permalink

Totally appropriate was the clip from Fight Club, given the almost infinite feedback loop tunnels of control frauds demonstrated by the article above! Even "corrections" of inverted perversions are inversely perverted.

Aubiekong Mon, 03/19/2018 - 17:57 Permalink

Must have been bad for that kind of payout.  How many of the top executives got prison time?  That's right none.  So who paid for the fine? The stock holders and the customers...

SantaClaws Mon, 03/19/2018 - 18:15 Permalink

But how much would whistleblower Harry M. Markopolos have earned if the SEC had investigated, instead of ignoring, his repeated detailed tips that Bernard Madoff was running a huge Ponzi scheme?

The SEC protected Madoff, but not BofA.  Why the difference?