2012-03-16

Whistleblowers galore

Terminated CBO Whistleblower Shares Her Full Story With Zero Hedge, Exposes Deep Conflicts At "Impartial" Budget Office
Earlier today, we suggested that in the aftermath of the Greg "Muppets" Smith NYT OpEd, contrary to assumptions by Jim Cramer, a bevy of potential whistleblowers would step up to tell their tale of fraud and corruption across all walks of life - from Wall Street to, far more importantly, Washington, consequences be damned. This was paralleled by an alleged JPM whisteblower describing to the CFTC the firm's supposedly illegal activities in the precious metals space, which while we initially dismissed, we now admit there may be more to the story (stay tuned), even though we still have our doubts. What we are 100% certain of, however, is that yet another whistleblower has stepped up, this time one already known to the general public, and one that Zero Hedge covered just over a month ago: we refer to the case of former CBO worker, Lan T. Pham, who, as the WSJ described in early February, "alleges she was terminated [by the CBO] after 2½ months for sharing pessimistic outlooks for the banking and housing sectors in 2010" and who "alleges supervisors stifled opinions that contradicted economic fixes endorsed by some on Wall Street, including research from a Morgan Stanley economist who served as a CBO adviser. As part of the review, Sen. Grassley's staff is examining whether Wall Street firms or others exert influence that compromises the office's independence."
In alluded to post, ZeroHedge had this to say about whistleblowers, see As Whistleblowing Becomes The Most Profitable Financial 'Industry', Many More 'Greg Smiths' Are Coming
Minutes ago on CNBC, Jim Cramer announced that Greg Smith will never get a job on Wall Street again as "one never goes to the press. Ever." Naturally, the assumption is that the secrets of Wall Street's dirty clothing are supposed to stay inside the family, or else one may wake up with a horsehead in their bed. There is one small problem with that. Now that compensations on Wall Street have plunged, and terminations are set for the biggest spike since the Lehman collapse, the opportunity cost to defect from the club has also collapsed. And if anything, Greg Smith's NYT OpEd has shown that it is not only ok to go to the press, but is in fact cool. So what happens next? Well, as the following Reuters article reports, 'whistleblowing' over corrupt and criminal practices on Wall Street is suddenly becoming the next growth industry.
It's not just Wall Street and the U.S. government that are deluged with whistleblowers, Google has them too, see 'Google is now just an ad company': Departing exec's Goldman Sachs-style rant about how search giant is now obsessed with harvesting people's private information
Whittaker says that CEO Larry Page, who took over the company from Eric Schmidt, had a focus on 'beating' Facebook in advertising - which led the company to shift its focus from established products such as Google Mail onto its controversial social network Google Plus and other 'social' products built for advertising.
'Google could still put ads in front of more people than Facebook, but Facebook knows so much more about those people. Google took it personally. Larry Page himself assumed command to right this wrong,' says Whittaker.
The American Federal Trade Commission expanded its probe into Google to look at Google's Plus network earlier this year, as part of an investigation into anti-competitive practices.
'The old Google made a fortune on ads because they had good content. It was like TV used to be: make the best show and you get the most ad revenue from commercials. The new Google seems more focused on the commercials themselves,' says Whittaker.
Multiple factors are in play as social mood declines. At the most basic level, people are unhappy. This makes them more likely to become angry at policies they disagree with, whether or not they talk about them. Negative social mood leads to a weak economy, which means companies cannot deliver as much pay and bonuses to workers and in the worst cases, they fire workers Both situations reduce the cost of speaking out. Finally, society is more welcoming of whistleblowers because they want to see governments, companies and people fall. The mood is negative and dirt sells much more quickly than during rising and positive social mood. So in a case such as Google, where the complaint is a change in corporate culture and focus, during rising social mood popular opinion may turn on the whistelblower and congratulate Google for being more profitable. Today, although there's no alleged wrongdoing, concerns over privacy and government investigations into Google raise the stakes that this type of rant could metastasize into something more.

No comments:

Post a Comment