In Bed with Wall Street by Larry Doyle

Author:Larry Doyle
Language: eng
Format: epub
Publisher: St. Martin's Publishing Group
Published: 2013-11-07T16:00:00+00:00

Nine

Code of Silence

The only way to deal with a whistleblower’s accusations—again, every single time and again often against your own instincts—is with a hyper-bias toward believing that the informant is onto something big. Such a bias must impel you to investigate every claim ferociously.

—Jack and Susy Welch, Reuters, May 1, 2012

From the outside, Wall Street appears to be involved in many different businesses. From consumer banking to investment banking, from trading and sales to mergers and acquisitions, from venture capital to private equity, from research to prime brokerage, Wall Street represents a diverse line of businesses offering a wide array of products.

From the inside, though, Wall Street is really only engaged in one business. Its single product has varying degrees of value depending on the specific situation. Often it is deemed virtually priceless and market participants will go to incredible lengths to gain access to it. All of the aforementioned lines of business on Wall Street ultimately come under the purview of this overarching pursuit. Of course, I’m talking about the information business. Those working on Wall Street know that information is everything.

No matter what discipline you’re in, the one with the most information holds all the cards. Information moves markets and changes valuations on a broad level, as well as within specific market sectors and individual securities. Information provides the edge that is often the difference between winning and losing on Wall Street, and those with access to it can often grow what might otherwise be a run-of-the-mill business into a veritable franchise. All this said, managing the flow of information so that markets remain fair, free, and balanced presents enormous challenges.

Within firms, managers are charged with ensuring that the exchange of information and subsequent transactions conform to the rules of the industry. Aside from the managers within a specific business, there are also typically independent risk managers to further review positions and exposures. Additionally, compliance professionals are charged with overseeing an array of businesses so that regulations are not violated. And finally, outside of the firms, regulators from an array of agencies, both governmental and nongovernmental, are challenged to maintain order and decorum across the entire industry.

Invariably there will be reckless drivers and others engaging in dangerous and perhaps illegal maneuvers while negotiating the twists and turns of Wall Street. This is true in every industry. Those who call attention to such violations, we call whistleblowers.

A whistleblower, under most legal definitions, is an employee who uncovers evidence of corruption or wrongdoing at his/her workplace and makes the difficult decision to disclose that information to the media, organizational executives, lawmakers, or other government authorities.

One would think whistleblowers and whistleblowing would be welcomed by executives in government, at regulatory organizations, and in private enterprise. But not always. Some view it as a threat or a challenge to an otherwise welcomed status quo. To this end, there are not-for-profit organizations such as the Government Accountability Project (GAP) and the Project on Government Oversight (POGO) that work with whistleblowers to promote corporate and government accountability.

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