Deutsche Bank Whistleblower Eric Ben-Artzi Explains What it Takes to Blow the Whistle on Fraud, by Guy Roinik. This appears a tad technical at points, but it is this financial crisis that started the Tea Party which led to Trump. It also a clue as to how the the financial types in places like Wall Street get stupendously rich at the expense of the rest of us. Deutsche Bank is one of the world’s truly big banks.

Deutsche Bank whistleblower Eric Ben-Artzi raised quite a few eyebrows this summer, when he publicly rejected a multimillion dollar award from the Securities and Exchange Commission via an op-ed in the Financial Times.

The award was Ben Artzi’s share of a $55 million settlement between the SEC and Deutsche Bank that concluded a five-year investigation into allegations that the bank had overvalued its derivatives portfolio at the height of the financial crisis, hiding potential trading losses. Ben-Artzi, a former risk officer at Deutsche Bank, was one of three whistleblowers who came forward in 2010-2011 and notified regulators of improper accounting at Deutsche Bank.

As a whistleblower, Ben-Artzi was entitled to 15 percent of the settlement under the Dodd-Frank Act. However, he publicly rejected his share of the award—which he estimates at $3.5 million after fees and payments to lawyers, experts, and his ex-wife. …

Overvaluing that portfolio is what prevented Deutsche Bank going bust. Technically, the bank would have been bankrupt. Instead they lied and cheated in their accounts, and regulators didn’t ask hard questions. The bank executives responsible fired anyone who didn’t go along with the fraud, and got paid huge bonuses. Judges and regulators got paid off.

Deutsche Bank should have gone bust, its shareholders and bond holders losing out because it was a failed business. A government would then nationalize the bank and run its day to day business so depositors did not lose out and the banking services continued so as not to disrupt the economy. Only the owners and executives of a failed business lose, basically. Then when the bank is solvent and profitable again, it gets sold by the government to a new bunch of shareholders. Then we would have an honest bank that plays by the rules, a system where people pay proper attention to risks, and where honest prices signal correctly to economic players so that optimal decisions are made regarding allocations of capital. Instead, we now have a corrupt bank that rigs prices and other unethical and illegal acts, a corrupt system skimming off vast fortunes from the public, and financial criminals knowing they will never be held accountable.

EBA: In the end, fast-forward a few years later, the SEC [the regulator] did accuse them, made the same allegations that I did, but they settled for much less, so effectively Deutsche Bank didn’t have to admit anything, and no executive had to pay any sort of price. No executive was mentioned or had to take any hit, even though this was a case where Deutsche Bank’s most senior officers paid themselves large bonuses based on false financials. They issued shares in the aftermath of the financial crisis that were overvalued [thereby defrauding people who bought those shares]. …

I felt like someone who saw a robbery and calls the cops. Then the cops show up, and it’s the guys who just robbed the victim, and they’re robbing the victim again, and now they were throwing me a few bucks out of their wallet, basically hush money. If I had taken that money, I would be party to this injustice on the one hand. I wouldn’t be able to speak here in front of you, because, “You took the money, what are you complaining about now?” I was just furious.

I think the short answer to the question of “How could you possibly not take the money?” is after you’ve gone through years of watching this injustice go on, you don’t want to be part of it. …

The purpose of my talk here, what I want you to walk away from this lecture with, is the understanding that the crime on Wall Street, the misdeeds on Wall Street, are a symptom. They’re not the disease. The disease is that in the judicial system in the U.S., there are far too many conflicts of interest that go not only unpunished, but unaddressed. It’s completely prevalent. … Judges also have conflicts of interest within the U.S. system. Unfortunately, those have not gotten any better in recent years. …

Unfortunately the SEC is not the only regulatory body in the U.S. that has been co-opted by the people that it’s supposed to regulate. …

I still remember sitting in front of my computer and filling out the SEC form, and being really scared about pressing that “send” button in the end, and before the first meeting with the SEC investigators, before going to the press. It was really frightening.

Before the story broke out at the Financial Times, I did not know what the outcome would be. For months when I was at Deutsche Bank, I increased the security on my computer. I lived in New York at that time. Every time I crossed the street, I would look both ways. I didn’t know what would happen to me.

I had to make sure that all the information that I had within Deutsche Bank was backed up, both with my lawyers, I kept some of it with a friend. There was always that concern. There was the concern when I was still at Deutsche Bank, I never knew, is my pass going to work this time when I try to get into the building?

I think that in the U.S in particular, but throughout the developed world today, corruption is probably the number one problem. The biggest fight that we have is against the influence of money in our government, but especially I would say in the legal system, because to me at least that’s the most painful part. …

You expect a lot from a judge or from a prosecutor. My experience over the last few years, seeing that that component of our system is for sale, especially in the U.S., was shocking. It was a huge disappointment.

Banks create newly manufactured money, and the legal system can be bought. What more is there to say?