COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S NOTE: The megabank lobbyists are at full throttle trying to prevent people who actually know what was done, who did it, and the intent of the banks as they try to sustain the fiction of of their current balance sheets and the fraud involved in nearly all foreclosures. Their problem is that with subpoenas coming at higher volume, there are people getting nervous about the opportunity to cut a deal with regulators or get financial compensation for reporting improper behavior of the banks.  Notaries are already turning on those who paid them to rent their notary stamps and “official” signing officers who were neither official nor officers are getting the point that what they did was wrong and that they will be hung out to dry as scape-goats if they don’t make their move.

Republicans Seek Changes to SEC Whistleblower Rule


WASHINGTON (Reuters) – U.S. House Republicans are mounting a last-ditch effort to influence a corporate whistleblower rule that companies fear will drive cash-hungry tipsters directly to the government, undermining internal compliance programs.

Experts from the U.S. Chamber of Commerce will be among the witnesses at a hearing Wednesday afternoon into the Securities

and Exchange Commission rule that responds to the whistleblower provisions in last year’s Dodd-Frank financial oversight law.

The SEC’s proposal would reward people who provide original substantive tips leading to enforcement actions that result in sanctions exceeding $1 million.

The whistleblower reward has become one of the most contentious parts of Dodd-Frank, as companies from Google Inc and Microsoft Corp to General Electric Co and JPMorgan Chase & Co have asked the SEC to change the proposal by requiring whistleblowers to report company problems internally before going to regulators.

Failing to do so, they say, will undermine internal compliance programs because employees will be enticed by the prospect of a reward of between 10 to 30 percent of the total monetary sanctions.

SEC officials told Reuters last week that the agency is not likely to agree to the demands for mandatory internal reporting, and that a vote on the plan could come as early as May 25.

House Republicans are exploring ways to force legislative changes to the whistleblower compensation program.

Representative Michael Grimm has drafted a bill that would amend Dodd-Frank by making internal reporting a requirement before a whistleblower can get a financial reward.

The bill would also change the law so that a whistleblower would not be guaranteed a reward, an effort to address concerns that the law as currently written may lead to an influx of frivolous tips.

Wednesday’s panel witnesses mostly support corporate America’s position on the whistleblower rule.

A whistleblower may “choose not to report internally because he or she believes that the company could then rectify the problem, and therefore be subject to lesser or no monetary sanctions upon which an award would be paid,” said Deloitte Deputy CEO Robert Kueppers in prepared testimony.

Only one witness on Wednesday is expected to testify that he is concerned about the changes to the law proposed in Grimm’s draft bill.

Geoffrey Rapp, a professor at the University of Toledo College of Law, plans to tell lawmakers that the whistleblower provisions in Dodd-Frank are vital and that whistleblowers are still likely to report wrongdoing internally first anyway because they see themselves as “loyal employees.”

(Reporting by Sarah N. Lynch; Editing by Tim Dobbyn)

6 Responses

  1. What about whistle-blowers — who are not an employee??? But know. Guess not taken seriously.

  2. The whistleblowers better work fast so they can get paid. It amazes me that the U.S. has fallen so low. What happened to Land of the Free, Home of the Brave. Maybe Pakistan will nuke us and things will improve–only kidding.

  3. I have a regional manager for Option One (now Sand Canyon) that was let go in 2008 that might have saved some interesting e:mails regarding policies and procedures.. I wonder if they know about the rewards?

  4. By the way – it’s not only “Republicans”. I see little difference between the parties on this housing nightmare, with but a few exceptions.

  5. Mr. Rapp says some employees will report wrongdoing – well that is the point – but because the employee reported the wrong doing to the employer, most never got to the authorities – I wish he was correct – but I do not see it.

    Besides, most want to keep their jobs so they keep their mouths shut. However, that could change now that so much has come out in the open about the banks practices.

  6. Wong and bad idea – Republicans will regret the day they do not allow a whistleblower to report to the regulatory. The idea that they must alert the very culprits that are and have been victimizing this nation goes on to set the ongoing stage for fraud and deception and further victimization of the American people.

    The lenders did just fine in the late 70’s and low 80’s when the auditors were doing surprise audits without prior notification to the lender/servicer. Then in the late 90’s, the lender/servicer received advance notice and not only that, were told exactly which files to pull. And pull those files the lender servicer did BEFORE THE AUDITORS GOT THERE. Needless to say, it appears they were paid off just like everyone else that participated in the financial scam of the century. This was why so many appraisals were allowed to be approved at values that clearly were not truthful. Know what, I don’t even know in this last stage whether the auditors even performed an audit and who issued those financial statements: Internal auditors, outside auditors, the State Auditors, the FDIC auditors – Wow! talk about a team effort.

    How does this make sense?. It did however put the lenders on notice that if they wish to commit such misdeeds, they would have an opportunity to clean up the file before the auditors reviewed it.

    This, I believe, was the turning point which led the way for such actions as were born in the mid and late 90’s and clearly set the stage for the securitization by others than Fannie and Freddie in the market place.

    The Republicans had better watch it – they have already crossed over the line with non judicial foreclosures in some states which clearly does not protect the interest of the consumer – They just did not count on the extent of the fraud that would be carried out through the non judicial foreclosure process – an unintentional consequence This of course also goes directly to the heart of the AG who did not do what was necessary to oversee the non judicial process in those states. It just doesn’t look right or feel right because it wasn’t right.

    Off point! It always appeared to me between 2006 and 2008 when modifications were beginning to be the name of the game, that Fannie and Freddie paid those servicers $750 for every modification they did. I bet there were a lot of homeowners whose files fell through the cracks simply because they were not an easy loan to modify (too much work involved) and so they took on the easiest in order to get that $750. This is what happens when you pay somebody – if it was okay then, why is it not okay for the whistleblower. Ummmmh.

    To get one servicer off dead center because they refused to modify a loan that clearly should have been approved – I told them – don’t worry fellas, I will be on the next plane to Washington – they have a hearing next week on this very thing. And I am sure the local DA might have a little something to say as well. I said this to the f/c mill attorney and the servicer and within just about an hour – they called to say they had worked it out. Really – playing games with a 72 year old widowed lady who had been placed in a predatory loan –

    The sad part is even this kind of threat does not good anymore – the bans feel they are in complete control – I wonder why?

Contribute to the discussion!

%d bloggers like this: