A former finance executive has been denied a substantial lump sum by the Securities and Exchange Commission (SEC) after whistleblowing on her former employer. Desiree Fixler, 54, publicly disclosed her concerns after discovering that Deutsche Bank was misleading investors regarding the integration of Environmental, Social, and Governance (ESG) factors into their investment strategies.
Following her disclosure, Fixler's evidence enabled the SEC to impose a $19 million fine on the firm. Under the SEC whistleblower program, tipsters typically receive between 10 and 30 percent of the amount fined. However, Fixler, who resides in London, learned last month that she would receive nothing.
The SEC denied her payout application because she first took her concerns to the media rather than directly to the commission. Fixler is now appealing the rejection in federal court. She told the Wall Street Journal: 'The SEC broke its own rules. I worked with them for two years, and then they denied me the award for the case I built.'
At the time of her public disclosure, Fixler was serving as the sustainability chief at DWS Group, the asset-management arm of Deutsche Bank. She previously told the outlet that DWS was misleading investors about its implementation of ESG. The group would inform every client that investment teams were actively using ESG factors to manage funds. Fixler uncovered a case where a German company that went bankrupt after a fraud scandal ended up in an ESG fund managed by the group.
After going public with the Wall Street Journal, she approached the SEC, which subsequently opened an investigation. In denying her award, the SEC stated: 'Where a claimant provides information to a media outlet, and commission staff learn of the allegations from the media outlet, a claimant has not provided the commission with information.' The commission did not consider her coming forward with the information to be voluntary because she went to the media first.
Fixler and her attorney argue that the SEC's definition of 'voluntary' defies the plain-English meaning of the term and blocks whistleblowers from speaking with the media. She noted that investigators referred to her cooperation as voluntary in their correspondence. Her attorney, Stephen Kohn, stated that the decision would harm whistleblowers looking to speak out about fraud or other concerns. Fixler added: 'This is a warning shot to every whistleblower who thinks about going to the press. Punishing whistleblowers for going public is unconstitutional.'
The SEC launched its whistleblower program in 2011 and has paid out over $2 billion to tipsters since then.
