Congress Should Protect Financial Sector Whistleblowers, Hold Wall Street Accountable

Statement of Emily Gardner, Worker Health and Safety Advocate, Public Citizen's Congress Watch Division

Note: Today, the Whistleblower Augmented Reward and Non-Retaliation (WARN) Act of 2016 was introduced by U.S. Rep. Elijah Cummings (D-Md.) and U.S. Sen. Tammy Baldwin (D-Wis.). Public Citizen joined 20 other organizations, including whistleblower advocacy groups, consumer and taxpayer protection organizations, and banking reform groups, in sending a letter (PDF) to Cummings and Baldwin expressing support for the bill. The WARN Act would update financial incentives and strengthen anti-retaliation protections for industry insiders who blow the whistle on bank fraud.

Our country still is recovering from the corporate fraud and abuse in the financial sector that led to the Great Recession of 2008. The WARN Act is an important step that would hold the financial industry accountable for its crimes and ensure that protections are in place for industry insiders who expose the wrongdoing of powerful financial institutions.

In recent years, financial industry insiders have blown the whistle on many of the worst Wall Street scandals. Current whistleblower programs at the U.S. Securities and Exchange Commission and U.S. Commodity Futures Trading Commission have been successful, receiving thousands of whistleblower alerts over the years.

Despite this initial success, though, financial institutions have continued finding new ways to chill employees' exercise of whistleblower rights, such as using confidentiality agreements forcing employees to waive their whistleblower rights, among other tactics. The WARN Act would prohibit these forms of employer retaliation and other discrimination aimed at preventing employees from disclosing fraud.

The WARN Act also would remove outdated caps on whistleblower rewards and close many other loopholes in existing financial sector whistleblower statutes. The legislation would expand protected whistleblower activities and remedies available to employees facing retaliation from their employers.

It is far past time for Congress to ensure that industry insiders have all the incentives and protections they need to disclose Wall Street fraud without fear of retaliation. Congress should quickly pass the WARN Act and empower financial sector whistleblowers.