BNP case spurs calls for whistleblower incentives in banking

Mon Jul 21, 2014 10:44am EDT
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By Henry Engler

NEW YORK (Reuters) - BNP Paribas SA’s $9 billion settlement with U.S. authorities, aided by internal whistleblowers, has spurred calls for federal banking regulators to protect and reward individuals who report wrongdoing by banks.

The U.S. Securities and Exchange Commission has scored big enforcement successes and delivered millions of dollars in awards to whistleblowers under a program from the 2010 Dodd-Frank overhaul of Wall Street. The Commodity Futures Trading Commission, as well as the SEC, will provide whistleblowers with a share of fines collected.

“We have a (whistleblower) law that covers tax fraud and fraud against the government (and) commodities and securities violations, but we don’t have similar laws for banking regulators," said Jordan Thomas, head of the whistleblower representation practice at law firm Labaton Sucharow and an architect of the SEC’s program. "To me, that is a significant gap.”

Whistleblowers played a prominent part in the case of French bank BNP Paribas, which on June 30 pleaded guilty to two criminal charges and agreed to pay nearly $9 billion to settle charges that it violated U.S. sanctions.

Thomas said he regularly received calls from people who want to report violations of banking law. ”I have to tell them there is not an avenue for them to report and receive a monetary reward,” he said.

The New York Department of Financial Services, which has jurisdiction on Wall Street, has pushed for state legislation to expand whistleblower protections to banks and insurance companies.

The bill would allow whistleblowers to share in fines resulting from information about violations of insurance, banking or financial services law. It would also protect whistleblowers from retaliation by their employers.


A BNP Paribas sign is pictured on a building of the bank in Geneva July 1, 2014.  REUTERS/Pierre Albouy