A month ago a whistleblower was awarded over $10 million by the Commodities and Futures Trading Commission, the largest ever in its history, over thirty times greater than the next highest award. To date, the identity of the tipster remains a closely-guarded secret known only to a select few in the CFTC and the lawyers representing the whistleblower for a number of a years. Fortunately, I have an inside track on this one, having worked the case together with Chris Fladgate—one of my partners—and we both watched the investigation develop through the looking glass.
Unlike the raft of whistleblower firms that pay-per-clickingly dominate the top tier of the Google (GOOGL) rankings, we stayed conspicuously silent, observing the know-nothings pontificating on the issues and touting for individuals to step forward. We were approached because confidence, trust and discretion is not something which can be garnered by shouting from the rooftops or SEO-ing up the wazoo.
We remain bemused how some people can offer to expose wrongdoing about which they are completely ignorant. Perhaps our success, compared to any other law firm, is because we view anonymity as a heavy burden. If you are going to shoot from deep cover, you must be pinpoint accurate. Every assertion was researched and tested, every step critically analyzed with the initial filter being able to evaluate the source of the information. As a result, information was provided that enabled the CFTC to open an investigation, levy a hefty penalty and, arguably, make root and branch changes to the system as a whole. Crucially, without the strict application of the veil of anonymity, even with the rewards on offer through the Whistleblower Program, it would be near impossible to incentivize people to step up and expose wrongdoing.
However, anonymity is abused in the current climate of mass leaks or hacks. Very few appreciate the gossamer-thin separations between privacy, confidentiality, an ethical duty to shed light on criminal behavior and the legal right to be unknown while blowing the whistle. As to who is entitled to claim that last coveted spot is both controversial and should be rare.
As is the way of the world, the desire to take a voyeuristic peek into the lives of the rich and famous far outweighs any privacy concerns.
A genuine shift in the attitude of the general public in the post Wikileaks era can be seen in the publication and openly accessible database of the Panama Papers, which has caused little ire—if any—to be directed at the hacker-tipster. Using technological anonymity, this person tapped into a journalist’s desire for a scoop in leaking the intimate private business details of a raft of companies, organizations and individuals without any regard to whether or not they were acting lawfully. While the facts may have been checked in the building of the database, seemingly there has been no appreciation of potential criminality by the hacker-tipster.
The indiscriminate data-splurge simply confirmed there are some, ably assisted by their lawyers, who keep monies offshore… oh, and a little bit of art looted by the Nazis. Had the Panama Papers been confined to the revelation of only the latter category of such material, the moral impetus to expose would have been justified.
The database, as it stands, is an awfully blunt instrument in revealing wrongdoing, especially as the collateral damage are breaches of confidence, evisceration of legal privilege and mass invasion of privacy—trifling matters the German newspaper Sueddeutsche Zeitung and the International Consortium of Investigative Journalists seemed to have glossed over.
The source of the information has escaped public condemnation and is being shielded from scrutiny by those with a vested interest in sensationalizing the leak or hack, without regard to the manner in which the data was obtained. Far removed from this is the CFTC or SEC whistleblower who quietly steps forward, exposes massive wrongdoing and is scrutinized behind the scenes by those charged with investigating and who can change market practices, eventually bringing the culprits to justice.
The danger that lurks is when publication or sensationalism—rather than criminal investigation—is the endgame. For the exposed who have acted legitimately, their right to financial privacy far outweighs any right of a journalist to build a searchable database with their details. The reporters know that nobody weeps for those with sufficient funds or business interests who would end up in the Panama Papers. As is the way of the world, the desire to take a voyeuristic peek into the lives of the rich and famous far outweighs any privacy concerns and they are powerless to have the intrusive buried.
Robert Garson is Managing Partner of Garson, Ségal, Steinmetz, Fladgate LLP, an intellectual property and international litigation firm in New York. He is also a barrister qualified in England and concentrates on IP and First Amendment matters.
