An irreverent Wall Street Blog
GUEST BLOG: Whistleblown by Michael Schwartz
August 1, 2017
An Introduction
What is it that makes someone credible? Do they need to be considered an "authority" on the issue, or is first-hand experience sufficient?
I did not wake up one day and decide that this is the day I was going to commit career and financial suicide. I was just doing what I was trained to do. Then, and I'll give you the Cliffs Notes version: shit hit the fan. How many of the financial industry scandals and multi-million, and billion, dollar fines could have been addressed from the get had someone acted appropriately when someone (i.e. a whistleblower) raised their hand to flag an impropriety?
In my case I made sure to follow all the proper protocols, to the extent that I put myself in harm's way so that nobody could say I didn't give Barclays the chance to do the right thing. A Form TCR Whistleblower referral was filed with the Securities and Exchange Commission. Regulators on both sides of the Atlantic have spent considerable time with me in investigating these and related issues. Most investigations remain open and active as far as I am aware, but no action has been taken against Barclays thus far. I don't infer anything by the status of matters either way. Like those from Wells Fargo whose referrals to the Department of Labor's OSHA for whistleblower retaliation were never investigated, I too experienced its apathetic approach to investigating retaliation claims. This isn't about establishing my whistleblower bona fides, however, and Barclays is a very different place these days. My former business unit doesn't even exist at Barclays any longer, and none of the parties involved (at least directly) are employed there any longer.
Not that it matters, but I put in approximately 13 years of service from 2002 - 2015 in the banking industry. I consider myself as having achieved a lot in my time in the industry, and for the most part had a good experience. I made a lot of friends, and I loved the clients who I had an opportunity to work with. I enjoyed being in the industry enough to fight as hard as I did to stay a part of it. Most of the people in the industry just want to do the right thing for their clients, and most of the banks do things the right way. Nobody will get it right all the time, but the good ones will admit it right away and make the wrong right again. For the most part, no harm no foul.
To highlight how things are supposed to work, I remember while I was at Bank of America a young analyst (not me to be clear) decided to check the math before a filing was due to be submitted and found a major error. The analyst raised his hand, as he was trained to do, and the bank owned it. It ended up being like a $4 billion adjustment to Bank of America's capital position. The bank took it on the chin, was a little bit embarrassed, but lived to fight another day relatively unscathed. Had the executives tried to shush that analyst, that analyst would have been put in a very challenging place. But that's not what happened. Instead, the analyst was praised. Events like that positively reverberate throughout an organization.
Why should anyone believe me or what I write in "Whistleblown"? I would suggest that you shouldn't. You shouldn't believe anything you read from anyone. You need to read, a lot, from different sources, with different points of view, and learn the various points and counter-points to frame up what will become your truth on a particular topic or issue. Bill Singer does a great job in balancing the various points of view and sides to any topic or issue, of course with the typical bent that FINRA and its arbitration forum have serious issues. I do not consider my being given access to his soap box as receiving his approval for my views or what I write, and neither should you. "Whistleblown" isn't an attempt to convince the reader that a fraud was committed at Barclays. It's not an attempt to re-litigate particular matters. It's not a mudslinging party, nor is it a pitty party. "Whistleblown" is about what happened after the whistle.
Whether anyone finds "Whistleblown" to be credible is largely irrelevant. I hope that readers find it so unbelievable that their first instinct is to call "bullshit"! Then, after pondering for a moment, ask themselves "what if it's true"???
What if it's true, indeed.
I have had many requests from friends, family, and followers from the LinkedIn business community to tell my story. People know various bits and pieces, have seen random articles or filings that are at times quite unflattering, but most seem to give the benefit of the doubt when they know who I've been up against. I have always said I'll write it when the story is complete. It's hard to write a book when you don't know how the story will end. I suppose the fact that I am still standing, albeit after a brutal seven-year slog and counting, is story enough. The playbook for how to treat your whistleblower is well read. The resources employed to crush any and all whistleblowers in the financial services industry are seemingly unlimited. The things I have seen, the behaviors I have witnessed, the onslaught I have faced, and the brutal treatment I have experienced are unfortunately not unique. Many of the things I have been able to do through this ordeal, however, are.
That my story involves Barclays is merely incidental. You could swap that name with any global financial institution today and not be surprised to find similar stories. But this is my story. Telling my story isn't about bashing a particular bank or the people involved (nor will I . . . it's not about them . . . it's about me), but to hopefully bring to people's attention the current state of affairs for whistleblowers, the various players involved, and highlight some of the insidious tactics employed. The banks are only a small part of the equation, but since they're the deep pocket greasing the machine, they rightfully bear the brunt of responsibility and criticism. The law firms fighting for the billions spent each year in legal fees, to the regulators toeing the line between making a name for themselves while ensuring a lucrative seat on the other side of the revolving door, to the goat-rodeo of the financial industry's captive overseer FINRA, to our Court system who's justice isn't as blind as it would like people to believe . . . all have an ownership stake in the current state of affairs . . . and all have earned themselves at least a chapter.
I will tell my story as it was, and is, because that is what makes it unbelievable. You can't make this kind of stuff up! What still angers me isn't so much that these things happened to me, but because they are happening to so many and that it's been going on for so long. I always considered myself a student of finance and have a strong grasp for the underpinnings and history of the industry. I am familiar with the players, the firms, and for the most part their histories. Instead of reading best sellers, thrillers, or light novels I prefer something a little different. From lighter reads came the every-new-employee-in-the-financial-services-industry-must-read "Liars Poker" from Michael Lewis, who later laid waste to industry excess and bad behavior in the all-too-real "The Big Short." Heavier reads include "The Intelligent Investor" from Benjamin Graham. Historical reads from Niall Ferguson include "The Ascent of Money", "High Financier" and "The House of Rothschild" volumes I and II. One of my favorite reads comes from William D. Cohan in "The Last Tycoons." What I have found, and especially highlighted via Niall Ferguson's writing, is that history continues to repeat. I also take inspiration from other whistleblowers past and present. There are too many to name, but those who follow me know that I take every opportunity to share their stories and bring attention to their plight.
I believe in function over form, but this is a very important project to me. Each story is amazing in its own right, and when pulled together is truly remarkable. Perhaps even more intriguing is the fact that we do not yet know how my story will finish. We get to learn the ending together. I hope to capture and relay what it is to be a whistleblower today, as well as relay a fascinating story and educate the reader as to the how and why of what was going on at the time. I'm not aware of another book self-published and distributed for free via LinkedIn, but I think it's an interesting concept. I am not going to put myself under any timetable to complete each Chapter and post, but I hope to post a new Chapter every 1-2 months. I suspect it will take about 18 months to complete . . . but we'll see. If a publisher wishes to approach me, they know where to find me. If you want to talk to me about doing a movie . . . I'm more of a Mark Wahlberg than a Shia LaBeouf. If you are a whistleblower, or are considering being a whistleblower and want to talk, I would be honored to listen. If you are a regulator and want some ideas as to where the bodies are buried, and you haven't already reached out to me, you know where to find me.
This is going to at times be a lot of fun for me, but will be quite painful at other times. The human toll of being a whistleblower is steep, despite what has been done in recent past to support and protect whistleblowers. Sometimes it feels like nothing more than lip service, and most of the time it is. Doing the right thing will never be easy, but if you were raised right, and then trained right, you know that doing the right thing is the right, and only, way forward. I applaud those institutions who have embraced the role of whistleblowers and enabled them to do the right thing without having to go through what many others like myself have had to endure. I have worked at such places. Whether supported or not, being a whistleblower is lonely. You have to become comfortable with the fact that you will be going it alone. If you are as lucky as I am, you'll have a core of family and friends to remind you why doing the right thing is still important. It requires resolve and determination to overcome the inevitable fear (which is not based on imagination . . . it is real . . . based on threats, intimidation, and knowing that you will likely be decimated financially). It takes a healthy dose of anger to withstand the retaliation and live to fight another day, resolved in knowing that your day will eventually come. Unless you have deep financial resources to call upon, it takes a unique strategy to play the long-game in order to overcome the go-to industry strategy of outspending the opponent until all opposition "dies on the vine". Like most, I didn't have the deep financial resources needed to fight in 1800's style linear legal warfare. I brought what I had. We'll see where we finally end up . . . but I guarantee you this . . . they will remember me.
I hope you enjoy "Whistleblown."
NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.