Wall Street, the financial meltdown and employment retaliation

The actions of a number of bankers, traders and other executives on Wall Street likely contributed to the economic downturn that occurred in 2008. At least three individuals who tried to blow the whistle on the illegal practices of banks and other financers ended up being either fired or leaving their jobs – rather than be awarded for doing the right thing.

The three apparently went to great lengths to report what was going on. Their story tells the risks that whistleblowers have to face when faced by wrongdoing of the employer. Sadly, what happened to them also appears to indicate just how unconcerned the banks were concerning the well-being of these three employees and the fact that any illegal activity was occurring.

As a former New York governor pointed out, this doesn’t just occur on Wall Street. It occurs in a number of large institutions including governmental agencies. Organizations become rigid and refuse to give credence to what the whistleblowers are saying. As in the instance of Wall Street employees, these individuals were blackballed and fired.

Prosecuting attorneys need these whistleblowers to prevent illegality from occurring. Otherwise there is often no case of wrongdoing that can be made against organizations that engage in illegal activity.

Providing an explanation of everything that led up to the Wall Street meltdown would of course be an impossible task in such a short space. Still, individuals that tried to prevent what occurred often became targets. One of the three whistleblowers had wished he had known more about what he was up against before revealing what he knew. “I wish I had known how ruthless external counsel for a corporation could be. I wish I had known that even if company policy may indicate it does not tolerate retaliation, retaliation may be in the eye of the beholder.”

It’s because such employees are entitled to protection from wrongful termination and employer retaliation that federal and state laws have been put into place.

Source: FT Magazine, “Wall Street whistleblowers,” William D. Cohan, May 30, 2014

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