Bill Singer speaks to Aegis Frumento, partner at Stern, Tannenbaum & Bell; Frumento is representing a client who, under the Security and Exchange Commission’s Whistleblower program, is accusing Sun Trust Bank of misrepresenting its exposure to risky mortgages underwritten during the years leading up to the housing bust in 2008. But under the statute of limitation rules, how efficient is the commission’s program? Out of some 10,000 whistleblower tips the agency has received, only 15 resulted in rewards, says Frumento. The problem? Between the SEC and the Dept. of Justice, agencies aren’t sure how to process the information they are given, and the whistleblowers’ attorneys don’t have access to where the investigations sit. “Whistleblowers don’t have legal standing,” Frumento says. “They are in limbo land."
Is Blowing the Whistle Wasting Time?