Whistleblower Participation Sought to Bolster Financial Fraud Task Force

A task force created by the Obama Administration in November 2009 to help hold accountable those responsible for the latest financial meltdown recently made a formal call to whistleblowers for information.  The Residential Mortgage-Backed Securities (“RMBS”) Working Group – an arm of the Financial Fraud Enforcement Task Force (“FFETF”) – is a collaborative effort by the Securities and Exchange Commission (“SEC”), the Department of Justice (“DOJ”), the New York State Attorney General’s Office, and others to investigate mortgage backed securities fraud. Although the working group has already made substantial headway investigating and addressing instances of financial fraud, it is now seeking to harness the power of information held by those who work inside the industry.  “The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it’s time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of bigger paydays,” Acting Associate Attorney General Tony West said in a DOJ statement released last Thursday, May 24.  In its efforts to corral whistleblower support, the members of RMBS have made it a point to underscore the financial award and employee protection provisions under many whistleblower protection statutes.  For example, individuals who provide reliable tips regarding securities fraud can recover 10-30% of the government’s monetary recovery under the SEC Whistleblower Program, if that recovery is in excess of $1 million.  Although the working group is still in its nascent stages, many are hopeful that its recent collaboration with whistleblowers will prove to be a fruitful relationship. The DC-based whistleblower law firm, Katz Banks Kumin, is active in representing whistleblowers in cases involving mortgage fraud and other financial misconduct, both in protecting employees against retaliation and in seeking awards before the SEC.  For more information about whistleblower law and the financial industry, please visit the Whistleblower Law page on our website.