WHISTLEBLOWER NEWS QUOTE OF THE DAY:

"Individuals who perform internal audit, compliance and legal functions for companies are on the front lines in the battle against fraud and corruption, They often are privy to the very kinds of specific, timely and credible information that can prevent an imminent fraud or stop an ongoing one."

- Sean McKessy, U.S. Securities and Exchange Commission's Office of the Whistleblower

Deutsche Bank Faces CFTC Sanctions Over Swap-Data Report Lapses

Deutsche Bank AG is facing sanctions after the U.S. Commodity Futures Trading Commission said the company violated multiple swap data reporting rules because of a system outage and had inadequate business continuity and disaster recovery plans.

On April 16, Deutsche Bank experienced a system failure that kept it from reporting swaps data for multiple asset classes for five days, the CFTC said in a statement Thursday. Efforts to correct the outage led to the discovery or creation of other problems that violated a previous order, the regulator said.

Deutsche Bank and the CFTC agreed to the appointment of a monitor to ensure the bank meets its reporting responsibilities. The regulator also wants to impose a fine and a permanent injunction on the Frankfurt-based company. read more »

Bharara Shows Path To Post-Newman Wins In Stewart Trial

The trial and conviction of formerJPMorgan Chase & Co. banker Sean Stewart for leaking confidential information about health care mergers to his father shows the Manhattan U.S. attorney's anti-insider trading effort remains strong, experts say, despite fears of a dampening effect caused by the Second Circuit’s landmark Newman decision.

On Wednesday morning, after more than five days of deliberations, jurors convicted Sean Stewart of conspiracy, securities fraud and tender offer fraud, even after signaling a possible deadlock to the court days earlier.

Sean Stewart, 35, a former investment banker for JPMorgan and Perella Weinberg Partners, was accused of illegally tipping off his father, Robert Stewart, 61, about five deals that took place from 2011 to 2015 involving Kendle International Inc., Kinetic Concepts Inc., Gen-Probe Inc.,Lincare Holdings Inc. and CareFusion Corp. read more »

3 GCs Who Blew The Whistle On Their Companies

Whistleblower and anti-retaliation rules have empowered several employees to call out corporate wrongdoing, and for the in-house counsel with deep insight into both the company’s actions and the bounds of the law, it’s a right and a responsibility. 

Sean McKessy, recently departed chief of the U.S. Securities and Exchange Commission's Office of the Whistleblower, has acknowledged that general counsels have a unique perspective that make them effective whistleblowers.

"Individuals who perform internal audit, compliance and legal functions for companies are on the front lines in the battle against fraud and corruption," he said. "They often are privy to the very kinds of specific, timely and credible information that can prevent an imminent fraud or stop an ongoing one.” 

Blowing the whistle, however, isn't always easy. Here are three in-house attorneys who say they paid the price for coming forward. read more »

JP Morgan Whistleblower Awarded $95,000 First whistleblower award in the state

Today, Indiana Secretary of State Connie Lawson awarded the first whistleblower award in the state of Indiana. The award of $95,000 was to an informant who provided the office with information on JP Morgan, which ultimately lead to a settlement of $950,000. The whistleblower received the maximum amount allowed under Indiana law, which is 10 percent of total monetary sanctions imposed.

“This case is the perfect example of why the whistleblower statue is in place,” said Secretary Lawson. “Without this individual coming forward, the office would not have uncovered this issue and Hoosiers would still be at risk. Thanks to Indiana law, we are able to provide a safe environment for individuals to come forth and protect Hoosiers from wrongful securities practices.” read more »

Moody's Says Whistleblower's Suit Alleges No False Claims

Moody's Corp. asked a New York federal judge on Thursday to toss the sole remaining claim in a suit alleging the credit rating powerhouse gamed its ratings of troubled mortgage securities, saying that a second amended complaint fails to show that Moody’s made false claims to the government.

Moody's argued in a hearing on its motion to dismiss that Ilya Eric Kolchinsky, a former Moody's managing director turned whistleblower, did not point to a specific falsehood that Moody's is alleged to have made that was tied to a payment from the government

The initial February 2012 complaint claimed that Moody’s issued glowing ratings for poor-performing residential mortgage-backed securities and collateralized debt obligations that should have been downgraded, in order to please issuers and keep their business coming in. The federal government has declined to intervene in the case. read more »