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David P. Weber

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David P. Weber
File:David P Weber.png -->
Born
David Paul Weber
Education
Occupation(s)Attorney and certified fraud examiner
EmployerGoodwin Weber LLC
Known forformer Assistant Inspector General for the U.S. Securities and Exchange Commission; whistleblower
SpouseJulie Goodwin Weber

David Paul Weber is the former Assistant Inspector General for Investigations at the U.S. Securities and Exchange Commission (SEC).[1] Weber was a whistleblower while at the SEC, reporting allegations about possible foreign espionage against the stock exchanges, and concerning misconduct in the Bernard L. Madoff and R. Allen Stanford ponzi scheme investigations, the two largest fraud cases in the history of the United States. He was terminated months later for supposedly unrelated reasons.[2][3][4] He sued the SEC, claiming wrongful termination and retaliation against him for coming forward as a whistleblower. In June 2013 the SEC settled with Weber his whistleblower protection and U.S. District Court lawsuits by reinstating him and paying him $580,000, one of the largest federal whistleblower settlements in US history.[5][6] Madoff and Stanford, meanwhile, were sentenced to prison for terms of 150 and 110 years, respectively.[7][8] Weber stated, after his reinstatement (and the incarceration of Madoff and Stanford), that "doing the right thing can be hard."[9] Weber and his law firm Goodwin Weber PLLC has become a leading advocate for whistleblowers throughout the federal government,[10]

Education

Weber graduated Utica College (Criminal Justice; cum laude, 1995), and Syracuse University College of Law (J.D., magna cum laude, 1998).[1][11] He was admitted to the New York State bar in 1999, the District of Columbia Bar in 2000 and the Maryland Bar in 2013.[12][13][14] He is also a Certified Fraud Examiner, and a member of the Association of Certified Fraud Examiners. He received his CFE designation in 2007.[15] In addition to being licensed to practice law in NY, DC, and MD, in 2013, Weber also became a licensed private investigator (with firearms authorization) in the Commonwealth of Virginia.[16]

Early career

Before and during law school, Weber served as a United States National Park Ranger for the U.S. Department of the Interior, at a number of historic and cultural sites, including the Statute of Liberty, Ellis Island, and Fort Stanwix National Monuments[17][18]. After graduation from law school, Weber traded his Stetson for a keyboard, and became a law clerk to a New York United States District Judge, working on criminal and civil cases. When his judge sat by designation on the United States Court of Appeals for the Second Circuit, Weber assisted with criminal and civil appeals in 1998 and 1999.[1][11] Subsequently, Weber was Special Counsel for Enforcement for more than ten years at the Office of the Comptroller of the Currency, at the United States Department of the Treasury.[1][11] He handled many ground breaking cases, including the OCC’s litigation against national banks involved in payday lending. Weber’s cases removed the practice from the national banking system.[19][20] He followed that up by practicing as Supervisory Counsel and Chief of Enforcement Unit I for the Federal Deposit Insurance Corporation (FDIC), responsible for overseeing all banking enforcement activities and investigations involving state chartered banks and bank failures for the western half of the United States.[1][11] While at the FDIC, Weber pioneered and directed each of the federal consumer protection cases against Refund Anticipation Loans (“RALs”), supposed income tax refund loans offered by each of the nation’s largest tax preparers, including Jackson Hewitt and Liberty Tax.[21] Weber served as the FDIC's signatory on the $1 billion settlement eliminating the RAL product from the nation's banking system.[22] He also directed and led the Consumer Financial Protection Bureau's first major enforcement action, against Discover Financial Services, resulting in restitution to American consumers of more than $200 million. [23][24]

Weber is an associate professor at the University of Maryland University College, as well as the lead faculty member for the school's fraud and forensic investigation minor program.[15] He is one of the highest-rated professors at UMUC for teaching excellence and student engagement.[25]

Securities and Exchange Commission

In January 2012, Weber was promoted to the U.S. Securities and Exchange Commission (SEC) Assistant Inspector General for Investigations at the Office of Inspector General, directing all criminal, civil, and administrative investigations into fraud, waste, and abuse in SEC programs and operations, and supervising the Office’s investigative staff. In this role, he served as the SEC’s chief investigator for internal affairs. [1][11] At the end of that same month, H. David Kotz, SEC Inspector General during the previous four years, resigned and returned to the private sector as managing director of Gryphon Strategies.[26] His resignation came in the midst of questions as to his conduct, as then-current and former SEC employees had complained that Kotz initiated investigations without credible evidence and unnecessarily tainted people's reputations.[27][26]

Kotz accusations, and paid leave

In March 2012, Weber alleged improper conduct by H. David Kotz, the former SEC Inspector General. He asserted that Kotz may have had personal relationships that tainted SEC investigations of the Bernard Madoff and R. Allen Stanford Ponzi schemes.[28][29][30][26] Kotz said Weber's accusations were "completely and utterly ludicrous and untrue."[31][32][33] Despite Kotz’s protestations to the contrary, further investigation proved the allegations were indeed true.[34]

Weber also reported potential “national security” concerns and “possible espionage” by “foreign nationals” related to a case Weber was investigating that “involved unencrypted computer hard drives that contained sensitive stock exchange information." [34] Instead, in May 2012, Weber was placed on administrative paid leave after fellow staff complained that he purportedly spoke openly about wanting to carry a concealed gun at work, and brought a bullet-proof vest to work.[2][29][26][31][32][35][36][37] He was also banned from entering SEC headquarters.[31] Weber denied those allegations.[38] U.S. Senator Charles Grassley (R-Iowa) sent a letter to SEC Chairman Mary Schapiro, asking for a copy of the “security threat evaluation” on the basis of which Weber was banned from the SEC’s offices.[39][40]

Williams report

Weber's allegations against Kotz led the SEC to bring in Inspector General David Williams of the U.S. Postal Service to conduct an independent, outside review.[28][34] The 2012 Williams report concluded that Kotz had in fact violated ethics rules by overseeing investigations that involved people with whom Kotz had “personal relationships.”[2][28][26] The report found that Kotz was a "very good friend" of Harry Markopolos, a whistleblower in the Madoff matter, and that if their friendship began before or during Kotz's Madoff investigation, that would have been inappropriate; Williams could not, however, establish when the friendship began.[30] The Williams report also found that during Kotz's investigation of Allen Stanford, Kotz had a personal relationship with a female attorney for Stanford's victims.[30] The Williams report found as well that Kotz exchanged flirtatious emails with an SEC staff member while Kotz was investigating an SEC program the employee worked on, but did not find any evidence that Kotz interfered with the investigation as a result of his relationship.[30] Still, the report held, "Kotz should have recused himself to assure that conflicts of interest did not manifest themselves."[30]

In addition, the Williams report looked at separate allegations that Weber had created a hostile work environment at the SEC. It did not find any evidence that Weber's conduct was improper or triggered security concerns.[30][26][4] The report made clear that the allegations of the bullet proof vest were false; the vest belonged to the SEC and was donned as “a joke after Weber’s colleagues placed smiley-face stickers on it.”[4]. SEC OIG staff also previously carried firearms; the USPS OIG report found that without law enforcement and weapons authority, the SEC OIG was unable to protect the rights of witnesses or complainants. The sole discussion of weapons at the SEC was in the context of re-certifying special agents to carry weapons after SEC OIG's certification had lapsed, prior to Weber being hired.[4] Finally, the Williams report found that Weber’s reports concerning the cyber compromise of the stock exchanges was accurate.[34][4]

Whistleblower allegations

Weber claimed the retaliation was intended to reprise against him for revealing misconduct within the SEC in the Madoff and Stanford investigations, perjury by Chairman Mary Schapiro in testimony before the United States Senate and House of Representatives, and to to delay the filing of reports to Congress on the gross misconduct of William S. Fagan (Chief of Security Services for the SEC), Jeff Heslop (Chief Operating Officer of the SEC), and Weber's investigation into the SEC for exposing potential vulnerabilities of the NYSE and NASDAQ Stock Exchange.[41]

According to Weber, Heslop was the target of at least two OIG investigations, including whether Heslop had improperly steered work to Booz Allen Hamilton.[41] The House Oversight and Government Reform Committee is probing the allegations. Chairman Darrell Issa noted that Thompson Reuters' report and investigation about the suspicious and wasteful hiring of the Booz Allen consultants were "broadly compatible" with the Weber lawsuit allegations.[41][42]

According to Weber, Fagan was engaged in pay to play schemes in hiring private security contractors, as well as substantial nepotism in the hiring of security staff. Weber also alleged that Fagan engaged in a cover up of multiple sexual assaults of guard staff and a female visitor to the SEC who was assaulted on a late night due to insufficient security at the SEC's Union Station headquarters.[43] Fagan then used the same private security contractor hired under the pay to play scheme to supposedly investigate Weber, a direct conflict of interest.[44] The US Postal Service OIG, in their 2012 report, found that Fagan's misconduct violated a number of laws and regulations, including the Standards of Ethical Conduct for Executive Department employees.[45][46] A subsequent SEC OIG report also found that Fagan engaged in a coverup of sexual assaults and failures to properly screen employees and contractors of the SEC for criminal convictions, a gross dereliction of Fagan's duties as head of security.[47]

The investigation into the NYSE and NASDAQ security lapses was detailed in an August 30 report by Interim Inspector General Jon Rymer.[48] His report stated that while there were 28 laptops in question, the outside firm conducted forensic testing on "several select laptops" to determine if a breach occurred. In response, NYSE Euronext hired former Homeland Security Secretary Michael Chertoff to make sure sensitive exchange data were not breached after U.S. securities regulators left their computers unencrypted.[49] Shortly after Weber reported the IT security lapses of the SEC, information technology firm Mandiant issued a report demonstrating that approximately 160 U.S. corporations and government agencies had been attacked and compromised by a unit of the Chinese Peoples Liberation Army.[50]

Dismissal and lawsuit

Weber worked at the SEC until October 31, 2012, when, months after becoming a whistleblower accusing the SEC of significant misconduct in the Madoff and Stanford investigations, as well as SEC's most senior management misconduct, he was fired for supposedly unrelated reasons.[2][29][36][51] He sued the SEC in federal court in Washington, D.C., in November 2012, saying he was wrongfully terminated and retaliated against for trying to investigate misconduct at the SEC and for coming forward as a whistleblower.[2][28][29][36] Less than two weeks after Weber's suits were filed, the Chairman of the SEC resigned, followed in short order by the resignations or firing of each senior management official of the SEC, including Heslop, Fagan, and the SEC's General Counsel, Mark Cahn.[52][53]

Kotz responded to the civil lawsuit saying that: "for some inexplicable reason, my na[54]me has been dragged through the mud in the most ludicrous and unbelievable allegations."[55][38] The SEC said it would "vigorously contest" the lawsuit.[56] Yet the allegations against Kotz were proven to be true, and the SEC did not contest the lawsuit, or even file an answer. [36] Instead of vigorously contesting the lawsuit as promised, in June 2013 the SEC settled the lawsuits with Weber by paying him $580,000, reinstating him from the date of his dismissal, and clearing his personnel and security records.[5][6] Weber purportedly received the third largest federal whistleblower payment in US history. [57] Despite being reinstated, Weber decided not to return to his former position, instead to stay in private practice by “helping others through my growing law and forensic investigations practice.”[4]

Goodwin Weber

He is a certified fraud examiner, and a member of the Association of Certified Fraud Examiners.[1][11] As of May 2013, in addition to practicing law full time, Weber was a faculty member of the University of Maryland University College’s fraud and investigations academic program.[58] As of June 2013, Weber and his wife Julie Goodwin Weber were principals in Goodwin Weber LLC, a boutique law firm with offices in Washington, D.C., Gaithersburg, Maryland and New York City.[59][41][60] Weber focuses his practice on representing government whistleblowers. In July 2013, Weber began representing a group of senior current and former Department of Justice employees in allegations against the most senior levels of Justice[61]. [62]

See also

References

  1. ^ a b c d e f g "UC grad now with SEC to speak at college". The Observer-Dispatch. January 13, 2012. Retrieved February 17, 2013.
  2. ^ a b c d e Matt Taibbi (November 19, 2012). "SEC Rocked By Lurid Sex-and-Corruption Lawsuit". Rolling Stone. Retrieved February 17, 2013. {{cite magazine}}: Cite magazine requires |magazine= (help)
  3. ^ Alex Kane (November 20, 2012). "Matt Taibbi: Lurid Sex and Corruption Scandal at SEC". Alternet. Retrieved February 17, 2013.
  4. ^ a b c d e f Hicks, Josh (June 12, 2013). "SEC settles whistleblower case with $580,000". The Washington Post. Retrieved June 12, 2013.
  5. ^ a b Schmidt, Robert (June 10, 2013). "SEC Pays $580,000 Over Ex-Investigator's Firing Claims". Bloomberg. Retrieved June 10, 2013.
  6. ^ a b Holzer, Jessica (June 10, 2013). "Accord Reached Over SEC Firing". The Wall Street Journal. Retrieved June 10, 2013.
  7. ^ http://www.nytimes.com/2009/06/30/business/30madoff.html?pagewanted=all&_r=0
  8. ^ http://www.forbes.com/sites/walterpavlo/2012/06/14/allen-stanford-sentenced-to-110-years-in-prison/
  9. ^ http://www.senseoncents.com/2013/06/sex-lies-stupidity-oh-my-sec-whistleblower-david-weber-vindicated-and-receives-huge-ettlement/
  10. ^ http://www.senseoncents.com/2013/06/sex-lies-stupidity-oh-my-sec-whistleblower-david-weber-vindicated-and-receives-huge-ettlement/
  11. ^ a b c d e f "Office of Inspector General; Semi-Annual Report to Congress" (PDF). SEC Office of Inspector General. October 1, 2011 – March 31, 2012. Retrieved February 17, 2013.
  12. ^ "David Paul Weber". Justia dot com. Retrieved February 26, 2013.
  13. ^ "Daivd P Weber". DC Bar. Retrieved May 28, 2013.
  14. ^ http://www.courts.state.md.us/cgi-bin/cstf.pl?inputname=weber&firstname=david&submit=Submit
  15. ^ a b "AFCE Fraud Conference and Exhibition speaker bios". Association of Certified Fraud Examiners. Retrieved February 26, 2013.
  16. ^ http://www.dcjs.virginia.gov/ps/directory/rocs/SearchResults.aspx
  17. ^ http://www.nps.gov/stli/index.htm
  18. ^ http://www.nps.gov/fost/index.htm
  19. ^ Douglas, Danielle (April 24, 2013). "Regulators to rein in bank payday lending". The Washington Post. Retrieved May 28, 2013.
  20. ^ Jackson, Ben (February 3, 2003). "OCC Payday Purge Done; Lenders Eye State Banks: FDIC Only Agency to Recognize 'Legitimate' Market, a Lender Says". American Banker. 168 (22).
  21. ^ Mendonca, Jochelle (December 9, 2011). "Republic Bancorp settles FDIC suit, to stop RALs in 2013". Reuters. Retrieved May 28, 2013.
  22. ^ http://www.sec.gov/Archives/edgar/data/921557/000115752311007107/a50100954ex10_1.htm
  23. ^ http://www.consumerfinance.gov/pressreleases/discover-consent-order/
  24. ^ http://www.marketwatch.com/story/did-discover-market-or-mislead-2012-09-24
  25. ^ http://umuc.uloop.com/professors/view.php/638566/David-Weber
  26. ^ a b c d e f Robert Schmidt (November 9, 2012). "SEC Fires Investigator Who Alleged Ethics Lapses, Lawyer Says". Business Week. Retrieved February 17, 2013.
  27. ^ Robert Schmidt, Joshua Gallu (January 19, 2012). "SEC Inspector General Kotz Quits For Private Investigation Firm". Bloomberg Businessweek. Retrieved February 26, 2013.
  28. ^ a b c d Schmidt, Robert (January 25, 2013). "SEC Said to Back Hire of U.S. Capitol Police Inspector General". Bloomberg. Retrieved February 17, 2013.
  29. ^ a b c d Main, Carla (November 16, 2012). "SEC Sued, MF Global, JPMorgan Suspended: Compliance". Bloomberg. Retrieved February 17, 2013.
  30. ^ a b c d e f "David Kotz, Ex-SEC Inspector General, May Have Had Conflicts Of Interest". Huffington Post. October 5, 2012. Retrieved February 17, 2013.
  31. ^ a b c Bruce Carton (May 16, 2012). "At the SEC, Investigations About Investigators Who Investigate Other Investigators". Compliance Week. Retrieved February 17, 2013.
  32. ^ a b Sarah N. Lynch (May 10, 2012). "David Weber, SEC Investigator, Put On Leave For Wanting To Carry A Concealed Firearm". Huffington Post. Retrieved February 17, 2013.
  33. ^ "'Sex and corruption rampant in US Securities and Exchange Commission'". Yahoo. November 20, 2012. Retrieved February 17, 2013.
  34. ^ a b c d Rymer, Jon. "SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL, WASHINGTON, D.C. 20549 – EXECUTIVE MISCONDUCT" (PDF). Retrieved May 28, 2013.
  35. ^ Gallu, Joshua (October 9, 2012). "SEC Watchdog Cites Report as Proof He's Not a Security Threat". Bloomberg. Retrieved February 17, 2013.
  36. ^ a b c d Lynch, Sarah N. (January 25, 2013). "SEC taps criminal investigator as top watchdog". Reuters. Retrieved February 17, 2013.
  37. ^ Blackden, Richard (May 11, 2012). "Top SEC investigator David Weber 'put on leave over gun comments'". Telegraph. Retrieved February 17, 2013.
  38. ^ a b Sarah N. Lynch (November 15, 2012). "David Weber Lawsuit: Ex-SEC Investigator Accused Of Wanting To Carry A Gun At Work, Suing For $20 Million". Huffingtonpost.com. Retrieved February 10, 2013.
  39. ^ Robert Schmidt (May 14, 2012). "Senator Presses SEC Over Decision to Put Investigator on Leave". Business Week. Retrieved February 17, 2013. {{cite magazine}}: Cite magazine requires |magazine= (help)
  40. ^ Joe Adler (May 17, 2012). "FDICs IG to Take Temporary Control of SECs Watchdog". American Banker. Retrieved February 17, 2013. {{cite magazine}}: Cite magazine requires |magazine= (help)
  41. ^ a b c d "Weber v. U.S. SEC; Complaint" (PDF). November 15, 2012. Retrieved February 17, 2013.
  42. ^ Lynch, Sarah (January 1, 2013). "Exclusive: U.S. House panel probes SEC spending on consultants". Reuters. Retrieved February 24, 2013.
  43. ^ http://www1.rollingstone.com/extras/Weber_complaint.pdf
  44. ^ http://www1.rollingstone.com/extras/Weber_complaint.pdf
  45. ^ https://muckrock.s3.amazonaws.com/foia_files/finalSEC12UIHQ0063GC37SI_SEC-OIG_A.pdf.pdf
  46. ^ http://www.oge.gov/Laws-and-Regulations/Employee-Standards-of-Conduct/Employee-Standards-of-Conduct/
  47. ^ http://www.thestar.com.my/Business/Business-News/2013/07/18/Watchdog-Finds-SEC-Did-Not-Properly-Vet-Contractors.aspx
  48. ^ Rymer, Jon. "Investigation into Misue of Resources and Violations of Information Technology Security Poilcies within the Division of Trading and Markets" (PDF). US SEC OIG. Retrieved February 25, 2013.
  49. ^ Reuters (November 16, 2012). "NYSE hires former Homeland Security chief". Chicago Tribune. Retrieved February 24, 2013. {{cite news}}: |last= has generic name (help)
  50. ^ Mcwhorter, Dan (February 18, 2013). "Mandiant Exposes APT1 – One of China's Cyber Espionage Units & Releases 3,000 Indicators". Retrieved May 28, 2013.
  51. ^ "Woodrow Wilson Visiting Fellows; David P. Weber". The Council of Independent Colleges. Retrieved February 17, 2013.
  52. ^ http://insurancenewsnet.com/innarticle/2012/11/26/secs-schapiro-resigns-after-whistleblower-suit--a-365129.html?lifehealth
  53. ^ http://www.40actblog.com/2012/12/sec-general-counsel-to-resign-from-the-sec.html
  54. ^ http://www.mainjustice.com/2013/07/18/on-eve-of-perez-vote-doj-employees-emerged-with-complaints-about-discrimination/
  55. ^ Matt Taibbi (November 19. 2012). "SEC Rocked By Lurid Sex-and-Corruption Lawsuit". Rolling Stone. Retrieved February 10, 2013. {{cite magazine}}: Check date values in: |date= (help); Cite magazine requires |magazine= (help)
  56. ^ http://mobile.reuters.com/article/businessNews/idUSBRE9030V320130104
  57. ^ Brenzel, Kathryn (June 10, 2013). "SEC Settles Ex-Official's Wrongful Termination Suit". Retrieved June 11, 2013.
  58. ^ "The Undergraduate School Faculty List". University of Maryland University College. Retrieved May 28, 2013.
  59. ^ "Home | Goodwin Weber PLLC". Goodwinweberlaw.com. Retrieved June 12, 2013.
  60. ^ "Goodwin Weber LLC – About Us". Goodwin Weber LLC. Retrieved February 27, 2013.
  61. ^ http://www.mainjustice.com/2013/07/18/on-eve-of-perez-vote-doj-employees-emerged-with-complaints-about-discrimination/
  62. ^ http://www.opednews.com/articles/Is-Thomas-Perez-Fit-to-Be-by-Joan-Brunwasser-130716-57.html

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