From snitches to riches. A whopping Sh36 billion award money was paid out last week by the US Securities and Exchange Commission (SEC) to a whistle-blower whose information helped its enforcement action - more than double (Sh13 billion) it paid out in 2020. Who would imagine “ratting” could be big business?
Our maximum payout (capped) at Sh5 million shillings by the capital markets authority compares miserably. It’s peanuts. If we seriously need a thriving snitching culture, that figure has to be “juiced-up”.
Remember Uncle Bernie’s con? Harry Markopolos, the celebrated whistleblower who outed his scam, had to endure years of being ignored by everybody.
He was dismissed several times whenever he raised the alarm about Madoff’s Sh5 trillion ponzi scheme. From politicians to the regulator, journalists, et al, no one bothered to listen.
But after the scam imploded at the end of 2008, leaving thousands of charities, investment funds and pensioners bereft of billions of dollars, he was vindicated.
He’s now a hero but at that time, facing the giant, he risked losing his career (even his life) and soiling his reputation. Why would anyone go through this hell only for Sh5 million?
Even claiming the award is for do-gooders only, remember, historically, many whistleblowers are never quite welcomed back into the job market.
The world has little patience for ethical activism. This is why this bounty needs to be upped.
Switching lanes. If you ask me how I feel about rats, snakes and tipsters in general? I believe they do us a huge service.
“Snitching” can help companies be accountable over ethical concerns ranging from workplace issues to questionable business practices.
Otherwise, we could have regulations that address some of these issues and nobody wants that. “Ratting-out” needs not be viewed negatively.
Everyone does it anyway. You see, every time you flag any content while using Facebook, Twitter or any other social media, you’re essentially snitching.
Someone said, you carry a snitch in your phone or car - know the thing that reveals your location?
I must admit snitching is not for the faint-hearted. Speaking out against a well-known company isn’t an easy choice. It's plenty of work too.
Acceptable intelligence has to climb this threshold; “new, authentic, relevant, complete and timely” information according to the Capital Markets (Whistleblower) regulations (2022).
Basically, you must be at the level that a Communist East German Cop would want you on their side. You ought to be sharp, know how to stir up a conversation just enough to elicit reactions, be endowed with good research skills, excellent memory for content storage and may be driven by a little jealousy.
Good thing non-disclosure agreements do not apply here.
To summarise, boost the payout. In addition, remove unnecessary hurdles like requiring whistleblowers to justify why they have to be compensated. Make clear the decision-making process on how the payout is arrived at - presently, it is shrouded in secrecy.
Be that as it may, snitching pays. If you smell a rat, be a rat.
The writer is the managing director of Canaan Capital.
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