Securities employees who decide to report covert unjust employer practices to other individuals are oftentimes taking a huge personal risk for public betterment. Without legal protection, these whistleblowers could end up facing termination, workplace harassment, and other retaliation. While various federal, state, and common laws exist to provide anonymity and other protections to whistleblowers, violations are not completely unprecedented. Perhaps unsurprisingly, some employers might still try to take illegal measures to find and persecute whistleblowers without regard for the rules. Fortunately, certain federal and state laws exist to also provide whistleblowers with justice because of the infringement of their rights.
Recently, New York state regulators ordered that Barclay PLC, as well as its New York branch, pay a $15 million fine for their “shortcomings in governance, controls and corporate culture” in handling a whistleblower matter. Barclay PLC’s chief executive officer, Jeff Staley allegedly tried to uncover the identity of an anonymous employee whistleblower. A New York Department of Financial Services probe uncovered that Barclay PLC’s handling of Staley’s situation potentially compromised its whistleblower program. As an additional caveat of the settlement, Barclays will submit a detailed written plan to ensure the implementation of the whistleblowing program as well as improve the board’s oversight going forward. Big banks, such as Barclay PLC are required to have a strong program in place to protect their employees.
The alleged violation ensued when Mr. Staley requested the head of Barclay PLC group security uncover the identity of the whistleblower author of two letters circling around the bank. The purported letters criticized Barclay PLC’s management, Mr. Staley and a newly hired employee, Tim Main. As repeated, Mr. Staley claims to have needed the identity of the letter writer to protect Tim Main from “personal attack”. The group chief compliance officer, general counsel and other bank officials had advised Mr. Staley to steer clear from his inquiries into the whistleblower. Yet, Mr. Staley claimed to have not been aware that unmasking a whistleblower was even against the law, according to news sources. Our whistleblowers find it puzzling how a highly ranked bank official could not understand nor respect the sanctity of whistleblower identity protections.
The securities industry relies on several federal laws as well as state laws to protect whistleblowers, including the New York Labor Law § 740’s anti-retaliatory provisions, the Sarbanes-Oxley Act of 2002, Internal Revenue Code 26 U.S.C.S. § 7623 (b) and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act allows people who come forward with information to remain anonymous and protected from any retaliation. Whistleblowers can receive up to 30% of any recovery that resulted from their tip regarding wrongdoing. All in all, such individuals with pertinent information will find that acting as a whistleblower could be safe and even profitable in some cases.
Our New York-based securities attorneys provide excellent representation for Dodd-Frank whistleblowers and others with original information in an investigation. If you would like more information about this matter, call to speak with one of our highly skilled whistleblower attorneys.