With a ruling Tuesday, the U.S. Supreme Court revived a long-running whistleblower lawsuit that accused Wachovia’s investment bank of violating accounting rules and skirting internal controls to pursue short-term profits.
The Supreme Court vacated a judgment in August 2016 by the U.S. Appeals Court for the Second Circuit that had affirmed a lower court’s decision to dismiss the case filed by two whistleblowers, including one who had worked in Charlotte.
The high court ordered the appeals court to give the case further consideration in light of a June 2016 Supreme Court ruling that interpreted an aspect of the federal whistleblower law called the U.S. False Claims Act.
“It has obviously breathed new life into our case, which is very important for everyone involved,” said Joel Androphy, a Houston-based attorney representing the plaintiffs. “This has been a very long road.”
One of the country’s foremost nonprofit legal advocacy groups for whistleblowers has taken up the cause of former JPMorgan Chase broker Johnny Burris who was fired after refusing to put his elderly clients into the bank’s own high-priced products.
The Government Accountability Project, which has represented Edward Snowden and other prominent tipsters, filed an appeal of a Department of Labor decision to uphold the bank’s termination of Burris in 2013. That same decision, issued last month, also found that the bank did retaliate against Burris, who’s now an RIA based in Surprise, Arizona.
JPMorgan drew the largest SEC fine of 2015, $307 million, for inappropriately pushing its own products, three years after Burris provided the commission with more than a thousand pages of documents and secret recordings supporting his allegations. Burris also accuses several of his managers of lying under oath or omitting material facts during a FINRA arbitration case.
JPMorgan Chase inappropriately retaliated against a former employee who raised questions about the bank’s sales tactics and investment products, the Labor Department found.
The bank was ordered to pay back wages and damages to Johnny Burris, a former broker at one of its Arizona branches. A letter released on Tuesday by the Occupational Safety and Health Administration, a division of the department, said that JPMorgan had violated provisions of the Sarbanes-Oxley law designed to protect whistle-blowers.
A spokeswoman for JPMorgan, Patricia Wexler, said the bank planned to appeal the findings. Ms. Wexler noted that the Financial Industry Regulatory Authority, the industry’s self-funded regulator, had previously ruled against Mr. Burris when he told an arbitration panel that he was fired as retaliation.
Former workers at Wells Fargo who resisted pressure to push banking products on customers who didn’t want them say the bank retaliated against them by docking their permanent record, sabotaging future job prospects.
OBERT SIEGEL, HOST:
2016 saw one of the biggest banking scandals in U.S. history. Regulators say Wells Fargo opened as many as 2 million credit card and checking accounts in customers’ names without their approval. On top of that, former Wells Fargo workers tell NPR that the bank destroyed their careers after they tried to report wrongdoing. Capitol Hill is investigating. We should say, NPR receives financial support from Wells Fargo. NPR’s Chris Arnold has our story.
CHRIS ARNOLD, BYLINE: It hasn’t been the happiest holiday season for a former Wells Fargo worker named David. After the bank fired him from his job at a branch in Florida last year, David’s been making half of what he used to. He can’t afford his rent anymore. So instead of wrapping up presents, David’s been packing up his belongings.
DAVID: It is a strain. I’m packing boxes, putting stuff in storage. And I’m moving a one-bedroom apartment into a storage unit and then moving into one room in a person’s house.
ARNOLD: Which is not where David wants to be at 54 years old and heading into the new year.
DAVID: On New Year’s Eve, I will be moving.
ARNOLD: Over the past few months, NPR has talked to former Wells Fargo workers in Florida, Pennsylvania, New Jersey, Los Angeles and San Francisco. They all say that managers at the bank retaliated against them for calling the company’s ethics line and pushing back against intense sales pressure to sign customers up for multiple credit cards and checking accounts.
DAVID: There’s no need to have all those accounts, especially when they’re charging you fees.
SAN FRANCISCO — A former branch manager for Wells Fargo has filed a federal lawsuit against the embattled bank, claiming that supervisors harassed her after she had alerted them to improper sales and account activity by employees.
Diana Duenas-Brown, who worked for Wells Fargo for 14 years, including 11 as a branch manager in a Sonoma County community, reported at least 25 instances of illegal or improper sales activity by employees in the bank district where she worked, according to the federal lawsuit.
“This case presents a classic example of whistleblower retaliation,” Duenas-Brown stated in the lawsuit, which was filed on Dec. 9. The former branch manager told her supervisor of “fraudulent, illegal, and deceptive practices against Wells Fargo customers,” according to the litigation.
In May, 2011, Peter Belli filed a complaint in Boston. With guidance from whistleblower experts at Mahany Law, he accused Allied Home Mortgage Capital Corporation of massive mortgage fraud in a False Claims Act “qui tam” whistleblower lawsuit.
Over five years later, and after a trial that lasted five weeks, a jury found both the corporation and its CEO, Jim Hodge, guilty of knowingly representing to Housing and Urban Development (HUD) that certain loans were properly prepared and eligible for Federal Housing Administration (FHA) insurance, when in fact they were not.
Belli had managed several Allied branches in Massachusetts, Rhode Island, Arizona, and other states. He was thus in an ideal position to observe Allied Capital’s fraudulent practices, and he was determined to bring the scheme to light. Unfortunately, he passed away before the verdict came out only days ago in Texas. The move to a Texas court had been a choice of the defendants.
Darrell Whitman, a former investigator for OSHA’s Whistleblower Protection Program, says his agency failed to investigate warnings from Wells Fargo employees in 2010.
Six years ago, two Wells Fargo employees filed whistleblower complaints with the federal government.
They sent their cases to the Department of Labor’s Whistleblower Protection Program, which is administered by the Occupational Health and Safety Administration.
But an investigator who reviewed cases for the agency says no one actually investigated the complaints.
This revelation comes as the nation reels from an enormous Wells Fargo banking scandal. The San Francisco-based company was fined $185 million last month after employees opened two million phony bank accounts and credit cards to meet sales goals.
Now Darrell Whitman is breaking his silence to the NBC Bay Area Investigative Unit, claiming if his agency had done its job, the bank’s widespread practice of opening fraudulent customer accounts could have been exposed and fixed years ago.
“I think it’s pretty obvious they don’t follow protocols,” Whitman said of OSHA. “You don’t do the job, that’s pretty close to dropping the ball, isn’t it?”
Whitman worked in the agency’s San Francisco office from 2010 to 2015. He says in May 2010, OSHA received two complaints from former Wells Fargo employees who claimed the company retaliated against them for raising red flags about the bank’s business practices.
Whitman says instead of investigating, the agency held the complaints for six months. He says in November 2010, after the two complainants decided to file federal lawsuits against Wells Fargo, his supervisors assigned him the cases simply to close them.
“They assigned it to me only for the purpose of dismissing the complaint,” he said.
According to OSHA policy, the agency is relieved of pursuing whistleblower cases when complainants head to court. But, Whitman says the agency should have started and completed the investigations before the whistleblowers filed their lawsuits.
Source: Former Federal Investigator Says Government Didn’t Investigate Wells Fargo Whistleblower Cases | NBC Bay Area http://www.nbcbayarea.com/news/local/Former-Federal-Investigator-Says-Government-Didnt-Investigate-Wells-Fargo-Whistleblower-Cases-397518261.html#ixzz4NavdiMn6