It's amazing how many employees will commit crimes to please
their bosses.
August 9, 2013
U.S. Said to Plan to Arrest Pair in Big Bank
Loss
By BEN PROTESS and JESSICA SILVER-GREENBERG
Updated, 9:30 p.m. | Government authorities are planning to
arrest two former JPMorgan Chase employees suspected of
masking the size of a multibillion-dollar trading loss, a dramatic
turn in a case that tarnished the reputation of the nation’s
biggest bank and spotlighted the perils of Wall Street risk-taking.
The former employees, who worked in London, could be
arrested in the coming days, according to people briefed on the
matter. The action, the people said, would involve criminal fraud
charges.
The employees — Javier Martin-Artajo, a manager who oversaw
the trading strategy, and Julien Grout, a low-level trader in
London — could ultimately be extradited under an agreement
with British authorities. Yet the people briefed on the matter, who
spoke on the condition of anonymity, cautioned that it is unclear
whether British authorities will be able to locate the men, who are
natives of other European countries.
Representatives for the F.B.I. and the United States attorney’s
office in Manhattan declined to comment, as did a spokesman for
JPMorgan. A lawyer for Mr. Martin-Artajo did not respond to an e-
mail. A lawyer for Mr. Grout could not be located.
The plan to arrest the traders hints at an aggressive new stance
from the government, which has come under fire for prosecuting
only a few Wall Street employees tied to the 2008 financial crisis.
Taking aim at employees of a Wall Street giant like JPMorgan,
even when they fall below the executive ranks, could send a
warning shot across the financial industry.
The losses at the heart of the JPMorgan case stemmed from
outsize wagers made by the traders at the bank’s chief
investment office in London. The traders used derivatives —
complex financial contracts whose value is typically tied to an
asset like corporate bonds — to bet on the health of large
corporations like American Airlines.
Those trades soured last year, racking up steep losses for the
bank. JPMorgan, which initially disclosed the problem last May,
has since announced that the losses reached more than $6
billion.
After more than a year of gathering evidence about the losses,
federal prosecutors and the F.B.I. in Manhattan have concluded
that the two employees understated the value of their trades to
hide the problem from executives in New York. Poring over
internal e-mails and phone recordings that shine a light on how
the employees valued the trades, authorities came to believe
that Mr. Martin-Artajo directed Mr. Grout to falsify internal
records.
Those actions, JPMorgan told authorities, caused the bank to
lowball the losses. Last July, the bank restated its first-quarter
2012 earnings downward by $459 million, conceding errors in
the valuations.
The charges hinge on the cooperation of another JPMorgan
trader, Bruno Iksil, nicknamed the London Whale because of his
role in the unusually large bet. Despite initially personifying the
trade — the blowup is referred to colloquially as “the London
Whale” — some investigators concluded that he was unfairly
blamed.
After giving multiple interviews to authorities, first at a meeting in
Brussels and then New York, Mr. Iksil secured a cooperation
agreement from the government. It is unclear, however, whether
he will face separate charges.
While authorities are not pursuing charges against JPMorgan’s
top executives, according to the people briefed on the matter,
the bank is nonetheless bracing for civil charges from regulators.
The Securities and Exchange Commission, which is expected to
cite the bank for lax controls that allowed the traders to
undervalue the bets, could strike a settlement with the bank as
soon as this fall.
The Financial Conduct Authority, a British regulator, also plans
to fine the bank in the coming months, one person said.
In an unusually aggressive move, the S.E.C. is seeking to
extract an admission of wrongdoing from the nation’s
biggest bank. If JPMorgan concedes to that demand, such
an admission would reverse a longtime practice at the S.E.
C., which has allowed defendants for decades to “neither
admit nor deny wrongdoing.” The people briefed on the case
added that the agency had not threatened to file civil charges
against JPMorgan executives.
As the criminal case progresses, the government could face
challenges in the courtroom. For one, Wall Street cases are
unusually difficult to prove to jurors who must grapple with
financial jargon.
That hurdle is particularly high in this case, which centers on the
vagaries of rules that even seasoned Wall Street employees
struggle to interpret. Under the rules, traders are granted some
leeway to value their trades on derivatives contracts because
actual prices may not be readily available, presenting a
challenge to prosecutors who must prove that employees
intentionally cloaked losses.
Even though JPMorgan itself is not the target of criminal scrutiny,
the case casts an unwelcome spotlight on the bank. The case
could highlight the way the traders breached the bank’s own risk
limits to make their bets — suggesting that JPMorgan, once
hailed for its risk management, had porous controls.
The case also comes at a time when JPMorgan, which recently
reported record quarterly profits, is already grappling with an
array of regulatory woes. The bank faces inquiries from at least
eight federal agencies, a state regulator and two European
nations. Adding to its headaches over the trading losses,
authorities are investigating the bank in connection with its
financial crisis-era mortgage business. The bank, for example,
recently disclosed that federal prosecutors in California are
investigating whether it sold troubled mortgage securities to
investors before the crisis. Regulators are also examining flaws
in the bank’s debt collection practices.
The investigation into the trading losses stems from early 2012.
As their bet worsened, JPMorgan has said, the traders started to
underestimate the losses.
Since announcing the losses, the bank has overhauled its
controls and ousted the employees involved in the bet. The bank’
s chief executive, Jamie Dimon, has apologized for the
breakdown.
The bank also commissioned an internal investigation into the
trades, ultimately turning over its findings to federal authorities
and a Senate subcommittee examining the losses.
An ensuing subcommittee report concluded that Mr. Martin-Artajo’
s team of traders stopped recording the value of their bet in a
“middle range,” shifting to some of the most generous possible
figures.
In one recorded phone call referred to in the report, the London
Whale, Mr. Iksil, told a colleague that the bank’s estimated losses
were “getting idiotic.” Mr. Iksil added that “I can’t keep this going”
and that he did not know where his boss in London “wants to
stop.”
Reflecting concerns about the estimates, Mr. Grout kept a
spreadsheet that tracked the difference between his valuations
and the midpoint. The documents, according to the
subcommittee’s report, showed that his valuations
underestimated the losses by more than $400 million.
Mr. Grout, the subcommittee said, told Mr. Iksil in a recorded
conversation, “I am not marking at mids as per a previous
conversation.”
their bosses.
August 9, 2013
U.S. Said to Plan to Arrest Pair in Big Bank
Loss
By BEN PROTESS and JESSICA SILVER-GREENBERG
Updated, 9:30 p.m. | Government authorities are planning to
arrest two former JPMorgan Chase employees suspected of
masking the size of a multibillion-dollar trading loss, a dramatic
turn in a case that tarnished the reputation of the nation’s
biggest bank and spotlighted the perils of Wall Street risk-taking.
The former employees, who worked in London, could be
arrested in the coming days, according to people briefed on the
matter. The action, the people said, would involve criminal fraud
charges.
The employees — Javier Martin-Artajo, a manager who oversaw
the trading strategy, and Julien Grout, a low-level trader in
London — could ultimately be extradited under an agreement
with British authorities. Yet the people briefed on the matter, who
spoke on the condition of anonymity, cautioned that it is unclear
whether British authorities will be able to locate the men, who are
natives of other European countries.
Representatives for the F.B.I. and the United States attorney’s
office in Manhattan declined to comment, as did a spokesman for
JPMorgan. A lawyer for Mr. Martin-Artajo did not respond to an e-
mail. A lawyer for Mr. Grout could not be located.
The plan to arrest the traders hints at an aggressive new stance
from the government, which has come under fire for prosecuting
only a few Wall Street employees tied to the 2008 financial crisis.
Taking aim at employees of a Wall Street giant like JPMorgan,
even when they fall below the executive ranks, could send a
warning shot across the financial industry.
The losses at the heart of the JPMorgan case stemmed from
outsize wagers made by the traders at the bank’s chief
investment office in London. The traders used derivatives —
complex financial contracts whose value is typically tied to an
asset like corporate bonds — to bet on the health of large
corporations like American Airlines.
Those trades soured last year, racking up steep losses for the
bank. JPMorgan, which initially disclosed the problem last May,
has since announced that the losses reached more than $6
billion.
After more than a year of gathering evidence about the losses,
federal prosecutors and the F.B.I. in Manhattan have concluded
that the two employees understated the value of their trades to
hide the problem from executives in New York. Poring over
internal e-mails and phone recordings that shine a light on how
the employees valued the trades, authorities came to believe
that Mr. Martin-Artajo directed Mr. Grout to falsify internal
records.
Those actions, JPMorgan told authorities, caused the bank to
lowball the losses. Last July, the bank restated its first-quarter
2012 earnings downward by $459 million, conceding errors in
the valuations.
The charges hinge on the cooperation of another JPMorgan
trader, Bruno Iksil, nicknamed the London Whale because of his
role in the unusually large bet. Despite initially personifying the
trade — the blowup is referred to colloquially as “the London
Whale” — some investigators concluded that he was unfairly
blamed.
After giving multiple interviews to authorities, first at a meeting in
Brussels and then New York, Mr. Iksil secured a cooperation
agreement from the government. It is unclear, however, whether
he will face separate charges.
While authorities are not pursuing charges against JPMorgan’s
top executives, according to the people briefed on the matter,
the bank is nonetheless bracing for civil charges from regulators.
The Securities and Exchange Commission, which is expected to
cite the bank for lax controls that allowed the traders to
undervalue the bets, could strike a settlement with the bank as
soon as this fall.
The Financial Conduct Authority, a British regulator, also plans
to fine the bank in the coming months, one person said.
In an unusually aggressive move, the S.E.C. is seeking to
extract an admission of wrongdoing from the nation’s
biggest bank. If JPMorgan concedes to that demand, such
an admission would reverse a longtime practice at the S.E.
C., which has allowed defendants for decades to “neither
admit nor deny wrongdoing.” The people briefed on the case
added that the agency had not threatened to file civil charges
against JPMorgan executives.
As the criminal case progresses, the government could face
challenges in the courtroom. For one, Wall Street cases are
unusually difficult to prove to jurors who must grapple with
financial jargon.
That hurdle is particularly high in this case, which centers on the
vagaries of rules that even seasoned Wall Street employees
struggle to interpret. Under the rules, traders are granted some
leeway to value their trades on derivatives contracts because
actual prices may not be readily available, presenting a
challenge to prosecutors who must prove that employees
intentionally cloaked losses.
Even though JPMorgan itself is not the target of criminal scrutiny,
the case casts an unwelcome spotlight on the bank. The case
could highlight the way the traders breached the bank’s own risk
limits to make their bets — suggesting that JPMorgan, once
hailed for its risk management, had porous controls.
The case also comes at a time when JPMorgan, which recently
reported record quarterly profits, is already grappling with an
array of regulatory woes. The bank faces inquiries from at least
eight federal agencies, a state regulator and two European
nations. Adding to its headaches over the trading losses,
authorities are investigating the bank in connection with its
financial crisis-era mortgage business. The bank, for example,
recently disclosed that federal prosecutors in California are
investigating whether it sold troubled mortgage securities to
investors before the crisis. Regulators are also examining flaws
in the bank’s debt collection practices.
The investigation into the trading losses stems from early 2012.
As their bet worsened, JPMorgan has said, the traders started to
underestimate the losses.
Since announcing the losses, the bank has overhauled its
controls and ousted the employees involved in the bet. The bank’
s chief executive, Jamie Dimon, has apologized for the
breakdown.
The bank also commissioned an internal investigation into the
trades, ultimately turning over its findings to federal authorities
and a Senate subcommittee examining the losses.
An ensuing subcommittee report concluded that Mr. Martin-Artajo’
s team of traders stopped recording the value of their bet in a
“middle range,” shifting to some of the most generous possible
figures.
In one recorded phone call referred to in the report, the London
Whale, Mr. Iksil, told a colleague that the bank’s estimated losses
were “getting idiotic.” Mr. Iksil added that “I can’t keep this going”
and that he did not know where his boss in London “wants to
stop.”
Reflecting concerns about the estimates, Mr. Grout kept a
spreadsheet that tracked the difference between his valuations
and the midpoint. The documents, according to the
subcommittee’s report, showed that his valuations
underestimated the losses by more than $400 million.
Mr. Grout, the subcommittee said, told Mr. Iksil in a recorded
conversation, “I am not marking at mids as per a previous
conversation.”
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Education Report
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San Diego
Education Report
Education Report
| SDER |
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| SDER |
Why This Website
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& Holtz v. Maura
Larkins defamation
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Elementary School
Law Enforcement
CTA
CVE
Stutz Artiano Shinoff
& Holtz
Silence is Golden
Schools and Violence
Office Admin Hearings
Larkins OAH Hearing
Stutz Artiano Shinoff
& Holtz v. Maura
Larkins defamation
SDCOE
CVESD
Castle Park
Elementary School
Law Enforcement
CTA
CVE
Stutz Artiano Shinoff
& Holtz
Silence is Golden
Schools and Violence
Office Admin Hearings
Larkins OAH Hearing
Disgruntled ex-employees and loyal employees
Loyal employees who help their bosses
"Tom Wieser, an attorney for the archdiocese, has called
Haselberger 'a disgruntled former employee.'"
In this case, it seems Father Flynn was the fox who helped
design the hen house.
For Minn. Catholics, Troubling New Abuse
Scandal
October 8, 2013 (AP)
By AMY FORLITI and PATRICK CONDON
Associated Press
When Jennifer Haselberger uncovered what looked like recent,
troubling sexual behavior by several Minnesota priests — a
stash of possible child pornography on one priest's computer
hard drive, another with a well-documented history of sexual
compulsion still leading a parish — she tried to ring alarm bells
at the top ranks of the St. Paul-Minneapolis Archdiocese.
But Haselberger, who resigned last April as the archdiocese's
chancellor for canonical affairs, said she felt ignored. She has
since gone public with concerns that Minnesota's archbishop
and top deputies failed to truly reform how they handle problem
priests, despite repeated promises to do so.
"I do not believe it can be said that the archdiocese is honoring
its promise to protect" children and young people, Haselberger
said last week in a statement to the media.
Unlike many of the abuse revelations that have rocked the U.S.
Catholic Church, the allegations Haselberger brought to light
aren't decades old or involve perpetrators long retired or dead.
They all happened after 2002, when U.S. bishops held a high-
profile meeting in Dallas and approved broad policy changes
meant to quickly remove predatory priests from parishes and
restore the church's tattered credibility with millions of Catholics.
"They weren't just going to sweep stuff under the rug. They
weren't going to move him around," said Joe Ternus, who in
2004 found what he called "a ridiculous amount of
pornography" on the hard drive of a computer he purchased at
a church rummage sale and that had belonged to Jonathan
Shelley, a parish priest.
Ternus, whose parents and sister attended Shelley's church,
turned the hard drive over to archdiocesan officials.
"I was given assurances that this wasn't going to happen, but
that's exactly what happened," Ternus said.
Haselberger's allegations have the St. Paul-Minneapolis
Archdiocese playing defense. Last week, Archbishop John
Nienstedt accepted the hasty resignation of his top-ranking
deputy, the Rev. Peter Laird, who wrote in his resignation letter
that he hoped to "repair the trust of many, especially the victims
of abuse." Nienstedt also convened what he said would be an
independent task force to examine the way church leaders
officials have handled accusations of sexual misconduct by
priests.
But church leaders weren't initially so eager to deal with the
cases. Minnesota Public Radio News obtained a letter from
Nienstedt to Cardinal William Levada, the now-retired Vatican
official who ran the office that oversees errant priests, spelling
out how an archdiocese investigator found pornographic
images on Shelley's hard drive that were at least "borderline
illegal, because of the youthful looking male images."
"My staff has expressed concern the fact that CD-ROMs
containing the images remain in the cleric's personnel file could
expose the archdiocese, as well as myself, to criminal
prosecution," Nienstedt wrote in the letter.
Haselberger told MPR News she was later told Nienstedt's letter
was never actually sent to the Vatican.
The archdiocese declined to make Nienstedt or Laird available
for interviews. Spokesman Jim Accurso said media coverage of
the recent allegations "leave a false impression about the
commitment of the archdiocese to identify and address sexual
misconduct by priests." He said eliminating any form of abuse is
the "highest priority" for the archdiocese.
Tom Wieser, an attorney for the archdiocese, has called
Haselberger "a disgruntled former employee." She worked at
the archdiocese from 2008 to last April, when she resigned
because of concerns about the way sexual abuse allegations
were handled.
According to a police report, Haselberger found computer discs
and a white three-ring binder in the vault last year that
appeared to be evidence from a 2004 internal investigation into
the images. A police report said Haselberger told Laird what
she found, and was instructed to "put them back in the vault."
Shelley's lawyer said there was no child pornography on the
disc. And an attorney for the archdiocese said a computer
forensics expert also found no evidence to support
Haselberger's allegations. Police also found no evidence of
child pornography, but acknowledged they didn't have the
computer itself.
Police received new information from Ternus on Friday, and on
Tuesday afternoon they announced they were reopening the
child pornography investigation. In his initial report, lead
investigator Sgt. William Gillet openly wondered whether the
archdiocese turned over all the pertinent evidence.
In the other case at issue, the Rev. Curtis Wehmeyer was
allowed to remain in ministry in St. Paul despite ample evidence
that archdiocesan leaders knew of sexual misconduct. He is
now in prison for sexually abusing two children and possessing
child pornography.
Haselberger told The Associated Press in an email Tuesday
that she raised concerns with her superiors in 2008, and again
last year.
"Having worked on similar cases in other dioceses, I was
completely unprepared for the responses I received in the
Archdiocese of Saint Paul and Minneapolis," she wrote.
The new policies formulated by bishops in 2002 were
specifically designed to quickly root out problem priests. One
church leader instrumental in that process
was Harry Flynn, Nienstedt's predecessor in
St. Paul-Minneapolis. Flynn is implicated in
some of the decisions that Haselberger
brought to light; he could not be reached for
comment Tuesday.
"Since 2002, there was a real sea change, and I believe most
bishops got it," said Nicholas Cafardi, a former church canon
lawyer who was involved in drawing up the new policies. Now a
professor at Duquesne University in Pittsburgh, Cafardi said he
would be personally shocked to learn that top officials in any
diocese sheltered potential abusers since then.
Cafardi cautioned that he's not familiar with the new allegations,
and noted in particular that finding a priest in possession of
legal pornography raises thorny questions for his supervisors in
the church. But if it's proven that church leaders failed to live up
to the 2002 policies, he said, it would damage the church's
efforts to move beyond past scandals.
"Any diocese that's not following that makes people question
the credibility of the policy," he said. "That then harms the
entire church in the U.S., because people will think if this bishop
does it, then is another bishop doing it?"
Haselberger 'a disgruntled former employee.'"
In this case, it seems Father Flynn was the fox who helped
design the hen house.
For Minn. Catholics, Troubling New Abuse
Scandal
October 8, 2013 (AP)
By AMY FORLITI and PATRICK CONDON
Associated Press
When Jennifer Haselberger uncovered what looked like recent,
troubling sexual behavior by several Minnesota priests — a
stash of possible child pornography on one priest's computer
hard drive, another with a well-documented history of sexual
compulsion still leading a parish — she tried to ring alarm bells
at the top ranks of the St. Paul-Minneapolis Archdiocese.
But Haselberger, who resigned last April as the archdiocese's
chancellor for canonical affairs, said she felt ignored. She has
since gone public with concerns that Minnesota's archbishop
and top deputies failed to truly reform how they handle problem
priests, despite repeated promises to do so.
"I do not believe it can be said that the archdiocese is honoring
its promise to protect" children and young people, Haselberger
said last week in a statement to the media.
Unlike many of the abuse revelations that have rocked the U.S.
Catholic Church, the allegations Haselberger brought to light
aren't decades old or involve perpetrators long retired or dead.
They all happened after 2002, when U.S. bishops held a high-
profile meeting in Dallas and approved broad policy changes
meant to quickly remove predatory priests from parishes and
restore the church's tattered credibility with millions of Catholics.
"They weren't just going to sweep stuff under the rug. They
weren't going to move him around," said Joe Ternus, who in
2004 found what he called "a ridiculous amount of
pornography" on the hard drive of a computer he purchased at
a church rummage sale and that had belonged to Jonathan
Shelley, a parish priest.
Ternus, whose parents and sister attended Shelley's church,
turned the hard drive over to archdiocesan officials.
"I was given assurances that this wasn't going to happen, but
that's exactly what happened," Ternus said.
Haselberger's allegations have the St. Paul-Minneapolis
Archdiocese playing defense. Last week, Archbishop John
Nienstedt accepted the hasty resignation of his top-ranking
deputy, the Rev. Peter Laird, who wrote in his resignation letter
that he hoped to "repair the trust of many, especially the victims
of abuse." Nienstedt also convened what he said would be an
independent task force to examine the way church leaders
officials have handled accusations of sexual misconduct by
priests.
But church leaders weren't initially so eager to deal with the
cases. Minnesota Public Radio News obtained a letter from
Nienstedt to Cardinal William Levada, the now-retired Vatican
official who ran the office that oversees errant priests, spelling
out how an archdiocese investigator found pornographic
images on Shelley's hard drive that were at least "borderline
illegal, because of the youthful looking male images."
"My staff has expressed concern the fact that CD-ROMs
containing the images remain in the cleric's personnel file could
expose the archdiocese, as well as myself, to criminal
prosecution," Nienstedt wrote in the letter.
Haselberger told MPR News she was later told Nienstedt's letter
was never actually sent to the Vatican.
The archdiocese declined to make Nienstedt or Laird available
for interviews. Spokesman Jim Accurso said media coverage of
the recent allegations "leave a false impression about the
commitment of the archdiocese to identify and address sexual
misconduct by priests." He said eliminating any form of abuse is
the "highest priority" for the archdiocese.
Tom Wieser, an attorney for the archdiocese, has called
Haselberger "a disgruntled former employee." She worked at
the archdiocese from 2008 to last April, when she resigned
because of concerns about the way sexual abuse allegations
were handled.
According to a police report, Haselberger found computer discs
and a white three-ring binder in the vault last year that
appeared to be evidence from a 2004 internal investigation into
the images. A police report said Haselberger told Laird what
she found, and was instructed to "put them back in the vault."
Shelley's lawyer said there was no child pornography on the
disc. And an attorney for the archdiocese said a computer
forensics expert also found no evidence to support
Haselberger's allegations. Police also found no evidence of
child pornography, but acknowledged they didn't have the
computer itself.
Police received new information from Ternus on Friday, and on
Tuesday afternoon they announced they were reopening the
child pornography investigation. In his initial report, lead
investigator Sgt. William Gillet openly wondered whether the
archdiocese turned over all the pertinent evidence.
In the other case at issue, the Rev. Curtis Wehmeyer was
allowed to remain in ministry in St. Paul despite ample evidence
that archdiocesan leaders knew of sexual misconduct. He is
now in prison for sexually abusing two children and possessing
child pornography.
Haselberger told The Associated Press in an email Tuesday
that she raised concerns with her superiors in 2008, and again
last year.
"Having worked on similar cases in other dioceses, I was
completely unprepared for the responses I received in the
Archdiocese of Saint Paul and Minneapolis," she wrote.
The new policies formulated by bishops in 2002 were
specifically designed to quickly root out problem priests. One
church leader instrumental in that process
was Harry Flynn, Nienstedt's predecessor in
St. Paul-Minneapolis. Flynn is implicated in
some of the decisions that Haselberger
brought to light; he could not be reached for
comment Tuesday.
"Since 2002, there was a real sea change, and I believe most
bishops got it," said Nicholas Cafardi, a former church canon
lawyer who was involved in drawing up the new policies. Now a
professor at Duquesne University in Pittsburgh, Cafardi said he
would be personally shocked to learn that top officials in any
diocese sheltered potential abusers since then.
Cafardi cautioned that he's not familiar with the new allegations,
and noted in particular that finding a priest in possession of
legal pornography raises thorny questions for his supervisors in
the church. But if it's proven that church leaders failed to live up
to the 2002 policies, he said, it would damage the church's
efforts to move beyond past scandals.
"Any diocese that's not following that makes people question
the credibility of the policy," he said. "That then harms the
entire church in the U.S., because people will think if this bishop
does it, then is another bishop doing it?"
Disgruntled employees
Disgruntled employees mount uprising on Twitter
It’s possible to tweet criticism about your employer — and
keep your job
By Quentin Fottrell
Reuters
April 2, 2014
There has been a Twitter Uprising at Mozilla. After the
appointment of Brendan Eich as CEO of the software
community, scores of employees made their feelings known
on Twitter about his decision to donate $1,000 to California’s
Proposition 8 ballot banning gay marriage in 2008.
Fulfilling their own philosophy (or, perhaps, prophesy) of an
open Internet, employees of the non-profit web company
vented their feelings on Twitter. Sunny Lee, an employee in
San Francisco, wrote , “I’m an employee of @mozilla and I
cannot reconcile @BrendanEich as CEO with our culture &
mission. I cannot support @BrendanEich as CEO.” Another
San Francisco-based employee, Zibi Braniecki, tweeted : “I’m
an employee of @mozilla and a supporter of LGBT rights and
I ask @BrendanEich to keep being a great leader and step up
as CEO.”
In fact, employee activism is on the rise, largely because
employees of all levels have found their voice through social
media, according to a new study released Wednesday.
Employee activists draw visibility to their workplace, defend
their employers from criticism and, at times, criticize their
employers, the study of 2,300 employees worldwide by public
relations firm Weber Shandwick found. More than one in five
employees is estimated to be an employee activist and one-
third of employers encourage their employees to use social
media to share news and information about the organization.
Click to Play
Can you tweet about your job without getting fired?
Companies that are the focus of disgruntled employees
venting on social networks can also find that just as many
employee activists can step in to defend them, Quentin
Fottrell reports on digits. Photo: Getty Images.
“The Internet and social media are game-changers for
employee communications,” says Leslie Gaines-Ross, chief
reputation strategist at Weber Shandwick. “What happened at
Mozilla this week is remarkable.” Half of those surveyed post
messages, pictures or videos on social media about their
employer, 39% have shared praise or positive comments
online about their employer, 16% have shared criticism or
negative comments online about their employer, and 14%
have posted something about their employer in social media
that they regret, according to the study.
In an era of anonymous Twitter accounts and blogs, the 140-
character horse has bolted. “Companies that try to control the
message sometimes do more harm than good,” says Jon
Hyman, a partner in the labor and employment group of
Kohrman Jackson & Krantz in Cleveland. “By trying to put a
gag order on people, companies risk creating a viral event
that might otherwise go unnoticed.” But there is also an
upside to allowing employees to talk about the company,
Gaines-Ross says, especially on social networks like LinkedIn
LNKD -3.23% where employees can become “influencers” in
their field.
On a legal level, non-disparagement agreements are more
difficult to enforce. “The National Labor Relations Board has
concerns about companies that run with these very broad gag
policies that relate to things going on in the workplace,”
Hyman says.
In recent years, the federal agency made its first rulings on
employer policies on social media. Under the 1935 National
Labor Relations Act, the NLRB can invalidate a company’s
social media policy, which it finds overly broad under
“protected concerted activity,” especially if they are discussing
terms and conditions of employment with fellow employees.
In 2012, for instance, the NLRB ruled that Costco Wholesale
Corp.’s COST +0.43% online policy violated the National
Labor Relations Act. Costco’s policy stated: “Employees
should be aware that statements posted electronically that
damage the company, defame any individual or damage any
person’s reputation or violate the policies outlined in Costco’s
Employee Agreement, may be subject to discipline, up to and
including termination of employment.” The NLRB ruled that
the policy prohibited employees from engaging in protected
communications because the policy contained a broad
prohibition.
Of course, the line “opinions expressed are my own” won’t
protect employees on Twitter TWTR -4.13% . Last year,
Justine Sacco, a PR executive for InterActiveCorp. IACI
-0.39% , a company that runs dating websites Match.com and
OkCupid, was fired after tweeting offensive comments about
AIDS in Africa. IAC acted fast to protect its reputation and
Sacco later apologized “for being insensitive to this crisis —
which does not discriminate by race, gender or sexual
orientation.” On Monday, OkCupid also urged its users to
boycott Firefox because of Mozilla’s CEO Prop 8 donation.
The good news: The positive impact of the employee activist
movement should not be underestimated, Gaines-Ross says.
Employers that engage with their employees have an
opportunity to turn them into “reputation advocates,” she
adds. Employees with bosses who encourage them to become
activists are significantly more likely to help sales (72%) than
employees whose employers aren’t socially encouraging
(48%), Weber Shandwick found. And more than half of
employees (56%) surveyed have defended their employer to
family and friends in a public venue.
It’s possible to tweet criticism about your employer — and
keep your job
By Quentin Fottrell
Reuters
April 2, 2014
There has been a Twitter Uprising at Mozilla. After the
appointment of Brendan Eich as CEO of the software
community, scores of employees made their feelings known
on Twitter about his decision to donate $1,000 to California’s
Proposition 8 ballot banning gay marriage in 2008.
Fulfilling their own philosophy (or, perhaps, prophesy) of an
open Internet, employees of the non-profit web company
vented their feelings on Twitter. Sunny Lee, an employee in
San Francisco, wrote , “I’m an employee of @mozilla and I
cannot reconcile @BrendanEich as CEO with our culture &
mission. I cannot support @BrendanEich as CEO.” Another
San Francisco-based employee, Zibi Braniecki, tweeted : “I’m
an employee of @mozilla and a supporter of LGBT rights and
I ask @BrendanEich to keep being a great leader and step up
as CEO.”
In fact, employee activism is on the rise, largely because
employees of all levels have found their voice through social
media, according to a new study released Wednesday.
Employee activists draw visibility to their workplace, defend
their employers from criticism and, at times, criticize their
employers, the study of 2,300 employees worldwide by public
relations firm Weber Shandwick found. More than one in five
employees is estimated to be an employee activist and one-
third of employers encourage their employees to use social
media to share news and information about the organization.
Click to Play
Can you tweet about your job without getting fired?
Companies that are the focus of disgruntled employees
venting on social networks can also find that just as many
employee activists can step in to defend them, Quentin
Fottrell reports on digits. Photo: Getty Images.
“The Internet and social media are game-changers for
employee communications,” says Leslie Gaines-Ross, chief
reputation strategist at Weber Shandwick. “What happened at
Mozilla this week is remarkable.” Half of those surveyed post
messages, pictures or videos on social media about their
employer, 39% have shared praise or positive comments
online about their employer, 16% have shared criticism or
negative comments online about their employer, and 14%
have posted something about their employer in social media
that they regret, according to the study.
In an era of anonymous Twitter accounts and blogs, the 140-
character horse has bolted. “Companies that try to control the
message sometimes do more harm than good,” says Jon
Hyman, a partner in the labor and employment group of
Kohrman Jackson & Krantz in Cleveland. “By trying to put a
gag order on people, companies risk creating a viral event
that might otherwise go unnoticed.” But there is also an
upside to allowing employees to talk about the company,
Gaines-Ross says, especially on social networks like LinkedIn
LNKD -3.23% where employees can become “influencers” in
their field.
On a legal level, non-disparagement agreements are more
difficult to enforce. “The National Labor Relations Board has
concerns about companies that run with these very broad gag
policies that relate to things going on in the workplace,”
Hyman says.
In recent years, the federal agency made its first rulings on
employer policies on social media. Under the 1935 National
Labor Relations Act, the NLRB can invalidate a company’s
social media policy, which it finds overly broad under
“protected concerted activity,” especially if they are discussing
terms and conditions of employment with fellow employees.
In 2012, for instance, the NLRB ruled that Costco Wholesale
Corp.’s COST +0.43% online policy violated the National
Labor Relations Act. Costco’s policy stated: “Employees
should be aware that statements posted electronically that
damage the company, defame any individual or damage any
person’s reputation or violate the policies outlined in Costco’s
Employee Agreement, may be subject to discipline, up to and
including termination of employment.” The NLRB ruled that
the policy prohibited employees from engaging in protected
communications because the policy contained a broad
prohibition.
Of course, the line “opinions expressed are my own” won’t
protect employees on Twitter TWTR -4.13% . Last year,
Justine Sacco, a PR executive for InterActiveCorp. IACI
-0.39% , a company that runs dating websites Match.com and
OkCupid, was fired after tweeting offensive comments about
AIDS in Africa. IAC acted fast to protect its reputation and
Sacco later apologized “for being insensitive to this crisis —
which does not discriminate by race, gender or sexual
orientation.” On Monday, OkCupid also urged its users to
boycott Firefox because of Mozilla’s CEO Prop 8 donation.
The good news: The positive impact of the employee activist
movement should not be underestimated, Gaines-Ross says.
Employers that engage with their employees have an
opportunity to turn them into “reputation advocates,” she
adds. Employees with bosses who encourage them to become
activists are significantly more likely to help sales (72%) than
employees whose employers aren’t socially encouraging
(48%), Weber Shandwick found. And more than half of
employees (56%) surveyed have defended their employer to
family and friends in a public venue.
A disgruntled employee at firm connected to Wolf of Wall Street
FBI Raids Florida Offices Of Firm With 'Wolf Of
Wall Street'
Reuters
Aruna Viswanatha and Zachary Fagenson
Jan. 14, 2015
WASHINGTON/BOCA RATON, Fla. (Reuters) - U.S. FBI agents
on Wednesday raided the offices of Med-Care Diabetic &
Medical Supplies Inc, a Florida medical device company whose
executive vice president helped inspire the movie "The Wolf of
Wall Street," according to a Reuters reporter and other
witnesses.
The reporter saw dozens of agents from the Federal Bureau
of Investigation, the Florida Division of Insurance Fraud, and
local police around the site. Witnesses told Reuters the agents
earlier closed entrances to the building that houses Med-Care
and removed boxes of files.
Danny Porush is a top executive at Med-Care who inspired the
character portrayed by actor Jonah Hill in the 2013 movie "The
Wolf of Wall Street," which told the story of defunct brokerage
firm Stratton Oakmont Inc.
...In 2014, a former Med-Care employee filed a
complaint in federal court in Florida accusing
Porush and the company of engaging in
Medicare fraud by using aggressive and misleading
telemarketers to sell unneeded medical equipment to patients.
U.S. District Judge Kenneth Ryskamp in December threw out a
part of the case, but let the rest of it go forward...
FBI Raids Florida Offices Of Firm With 'Wolf Of
Wall Street'
Reuters
Aruna Viswanatha and Zachary Fagenson
Jan. 14, 2015
WASHINGTON/BOCA RATON, Fla. (Reuters) - U.S. FBI agents
on Wednesday raided the offices of Med-Care Diabetic &
Medical Supplies Inc, a Florida medical device company whose
executive vice president helped inspire the movie "The Wolf of
Wall Street," according to a Reuters reporter and other
witnesses.
The reporter saw dozens of agents from the Federal Bureau
of Investigation, the Florida Division of Insurance Fraud, and
local police around the site. Witnesses told Reuters the agents
earlier closed entrances to the building that houses Med-Care
and removed boxes of files.
Danny Porush is a top executive at Med-Care who inspired the
character portrayed by actor Jonah Hill in the 2013 movie "The
Wolf of Wall Street," which told the story of defunct brokerage
firm Stratton Oakmont Inc.
...In 2014, a former Med-Care employee filed a
complaint in federal court in Florida accusing
Porush and the company of engaging in
Medicare fraud by using aggressive and misleading
telemarketers to sell unneeded medical equipment to patients.
U.S. District Judge Kenneth Ryskamp in December threw out a
part of the case, but let the rest of it go forward...
Happy employees won't tell the truth about their bosses. If you want the truth, you need a
disgruntled employee.
disgruntled employee.