This is truly a remarkable example to set: a former risk officer, Eric Ben-Artzi, turned Deutsche Bank whistleblower, has refused to collect his $8.5 million reward from the SEC. He points out that levying a $55 million fine for illegal activities on the corporation has only served to penalize shareholders and employees while letting the firms executives and lawyers (the directing minds) keep all their status and proceeds of crime (bonuses and fees). Bravo Mr. Ben-Artzi. See We must protect shareholders from executive wrongdoing:
“Although I need the money now more than ever, I will not join the looting of the very people I was hired to protect. I never intended to turn a job in risk management into a crusade, but after suffering at the hands of the Deutsche executives I will not join them simply because I cannot beat them.
I request that my share of the award be given to Deutsche and its stakeholders, and the award money clawed back from the bonuses paid to the Deutsche executives, especially the former top SEC attorneys.
I would then be happy to collect any award for which I am eligible.”
Why does the SEC routinely choose to only fine offending corporations while letting the directing executives off scot-free? Because the public allows outrageous nepotism and conflicts of interest to continue unchecked between finance/regulators/politicians. What will it take for we, the people, to force change? Ben-Artzi lays it out it in plain language:
Deutsche’s top lawyers “revolved” in and out of the SEC before, during and after the illegal activity at the bank. Robert Rice, the chief lawyer in charge of the internal investigation at Deutsche in 2011, became the SEC’s chief counsel in 2013. Robert Khuzami, Deutsche’s top lawyer in North America, became head of the SEC’s enforcement division after the financial crisis. Their boss, Richard Walker, the bank’s longtime general counsel (he left the bank this year) was once head of enforcement at the SEC.
This goes beyond the typical revolving door story. In this case, top SEC lawyers had held senior posts at the bank, moving in and out of top positions at the regulator even as the investigations into malfeasance at Deutsche were ongoing.
This took place on the watch of Mary Jo White, the current chair of the SEC, whose relationship with Mr Khuzami and Mr Rice dates back 20 years. She bears ultimate responsibility for the Deutsche fine.