Occupying Wall Street and Main Street: What Are the Real Issues?Occupying Wall Street and Main Street: What Are the Real Issues?
What Were the Lessons Learned from the 2010 Elections?What Were the Lessons Learned from the 2010 Elections?

We keep trying to figure out just what caused the mortgage meltdown and credit crisis, and one might very well ask, “Didn’t anyone know what was  going on? Did anyone ask? Did anyone care?”

The  truth is – many did. Richard Bowen, now a  Senior Lecturer at the University of Texas- Dallas, the Jindal School of Management, was one who did. Richard was the Business, Chief underwriter at  Citi Financial, a subsidiary of Citigroup. His job was to oversee the credit quality of $90 billion of mortgage loans, which had been purchased by Citi from mortgage companies and banks. Some of these loans were sold to Freddy Mac and Fannie Mae – which are now in conservatorship with the Government.

Richard Bowen noticed that over 60% of these loans did not meet accredited guidelines. He attempted to warn everyone in his business unit that Citi  Financial had a serious problem with these mortgage loans. That problem eventually escalated from 60% to 89% of these loans not meeting quality standards — yet he was still ignored. Richard Bowen again warned all of  the key parties at Citi Financial.

Whistleblowers: Inside the Mortgage MeltdownAfter  attending a UT-Dallas, Institute for Corporate Governance seminar, and listening to  Michael Oxley, one of the key writers of Sarbanes- Oxley, he realized he had no ethical choice but to take action regarding  Citi Financial’s ignoring his warning signals. So he did. Yet, while investigations proceeded, little to nothing was done. His complaint was relegated to almost non-existence and given little to no attention.

Richard Bowen took further action. He  became a whistleblower. Today he is no longer with Citi Financial. In this episode we learn more about Bowen’s story and the role he played.

From Left to Right: Richard Bowen, Dennis McCuistion, and Wayne Shaw

We hear from Dr. Wayne Shaw, Helmut Sohmen Distinguished Professor of Corporate Governance; KPMG Institute for Corporate Governance at Southern Methodist University, about  the other side of whistleblowing and what an individual may encounter in the process. Dr. Shaw talks about what whistleblowing is, how it works, and the risks to the person who blows the whistle. According  to Wayne Shaw; people who take this step often lose their jobs and are shunned; often not getting a job in their industry again.

Ultimately, becoming a whistleblower is a choice- and one with, perhaps, heavy consequences. Yet, the ultimate question may be one of personal integrity. If something is wrong, do you keep quiet so as to protect yourself? Or stand up and take the risks?

Thanks for joining us:

Niki Nicastro McCuistion
Executive Producer/ Producer
Business consultant on transformational change…
nikin@nikimccuistion.com

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02.12.2012 – 1923

Occupying Wall Street and Main Street: What Are the Real Issues?Occupying Wall Street and Main Street: What Are the Real Issues?
What Were the Lessons Learned from the 2010 Elections?What Were the Lessons Learned from the 2010 Elections?