“Those who cannot remember the past are condemned to repeat it.” I think of this wisdom from philosopher George Santayana when I look at the proposed whistleblower rules from the Securities and Exchange Commission (SEC), which apparently cannot remember the financial crisis of 2007-09 and thus risks sending us into yet another crisis with its proposal to radically scale back whistleblower protections.
Widespread, undetected securities fraud was a key reason for the 2007-09 financial crisis. After the crisis unfolded, we learned that mortgage originators had sold loans they knew were likely to default, banks had misrepresented the quality of their loans, and issuers and underwriters of mortgage-backed securities bet against them even as they sold them to trusted clients. Lying to shareholders about these practices was widespread. In the subsequent Great Recession, millions of people suffered from these frauds as U.S. housing prices fell 32 percent, more than the price plunge during the Great Depression.
Fortunately, we at the National Whistleblower Center and our hundreds of thousands of volunteer supporters have the power to help prevent another financial crisis. We know that protecting and rewarding whistleblowers is the best way to help law enforcement officials detect and prosecute securities fraud. We know the critical importance of “blowing the whistle” on the pending SEC rulemaking, which would take away critical protections and rewards from securities fraud whistleblowers.
If you are one of our many supporters who have responded to our action alert by expressing concern to the SEC and your Congressional representatives, thank you! If you would like to join our Million Message Campaign, it’s not too late, scroll down further and get involved. Through teamwork, we can stop this damaging rulemaking and help expose the massive frauds that harm so many people.