Last month, Silicon Valley Bank (SVB) and Signature Bank collapsed — the second and third-largest bank failures, respectively, in U.S. history. The breakneck speed of their downward spirals suggests a cocktail of gross mismanagement blended with a colossal failure of regulatory oversight. Investigations, oversight hearings, and lawsuits will reveal more details in the weeks and months ahead. As whistleblower lawyers, we know from experience that when it comes to crises like these, there are almost always conscientious employees who provided early warnings to managers and regulators but were ignored or silenced. If we are to prevent future bank failures and protect our economy, we need to modernize protections for bank whistleblowers.
History teaches us that institutional or industry-wide failures can be avoided or minimized if whistleblowers are embraced instead of attacked. Sherron Watkins tried to address fraud within Enron. Cynthia Cooper exposed massive accounting fraud at WorldCom. Richard Bowen warned Citigroup about subprime mortgage risks. Eileen Foster reported lending fraud, and Michael Winston refused to lie to rating agencies about Countrywide’s corporate governance and succession structure. These brave whistleblowers and many others helped pave the way for reforms like the Sarbanes-Oxley Act (SOX) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
In passing Dodd-Frank, Congress tightened regulatory oversight in segments of the...
On 30 April 2026, DOJ announced a new anti-fraud initiative: the Fraud Oversight through Careful Use of Statistics (FOCUS) initiative. The FOCUS initiative is intended to strengthen DOJ’s working ...