Monday 11 December 2017

Sticking to principles pays dividends for whistleblower

BLOOMBERG recently had a heart-warming story about a woman, Sherry Hunt, who grew up in rural Michigan, fishing and picking wild mushrooms, married at 16 and had a child a year later.

This being America, she was still able to find a job in a small bank and was rapidly promoted despite the dual handicap of being a woman without education.

Thirty years later, Hunt ended up as vice president of Citigroup's mortgage unit which was the sixth-largest lender in the US at the time and responsible for 3.5pc of all home loans.

Hunt's team was responsible for protecting Citigroup from fraud and bad investments but she became increasingly concerned by 2006 that many of the mortgages were dross which had been obtained by doctored tax forms, phony appraisals and missing signatures. It was Hunt's job to identify these defects over the next few years.

In March 2011, more than two years after Citigroup took $45bn in bailouts from the US government and billions more from the Federal Reserve, senior officials at the bank ordered Hunt to report fewer defective mortgages.

She refused and took her employer to court. Five months later, Citigroup was forced to pay $158.3m to the US government to settle the case which included $31m for Hunt as a reward for blowing the whistle on her employer.

Almost none of this uplifting tale could happen here but it goes a long way towards explaining why the US is not doing too badly right now.

It will take a lot more than legislation for the banks to start giving women a real chance when it comes to promotion, but the Government and opposition should consider this tale as it shepherds its whistleblower bill through the Dail.

The prospect of winning enough cash to set yourself up for life might encourage a few people inside the financial services sector to blow the whistle and tell us where the bodies are buried.

Indo Business

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business