Northwest B.C. lawyer receives civil courage award

Alayne Fleischmann honoured for speaking out against bank scandal

A Wall Street lawyer born and raised in B.C. recently earned a civil courage award for blowing the whistle on the massive bank fraud that was part of the U.S. 2008 financial crisis.

Alayne Fleischmann was nicknamed “the $9-billion witness” for testifying against the JPMorgan Chase financial institution regarding a sub-prime mortgage scandal.

She was presented the Wallenberg-Sugihara Civil Courage Award on Jan. 14, an award given to B.C.-connected citizens who have faced significant personal risk to advance human rights.

Fleischmann grew up in Terrace, B.C, and attended Cornell Law School before taking a job with JPMorgan from 2006 to 2008. While working as a transaction manager, she discovered the company was re-selling sub-prime mortgages without notifying investors about the risk.

Fleischmann spoke out against the practice, but was silenced and later fired.

Now living again in Terrace, Fleischmann is a potential witness in ongoing litigation and was unable to speak on the record with Black Press.

But according to earlier U.S. news reports, Fleischmann had secretly testified to federal prosecutors about the fraud, but when lawyers would not move forward with charges, she eventually had enough.

After years of seeing no criminal charges, and watching out-of court settlements with other banks, she decided to speak out publicly against the JPMorgan, exposing the fraud that had occured eight years earlier.

“It was like watching an old lady get mugged on the street,” she told Rolling Stone magazine in her first public interview. “I thought, ‘I can’t sit by any longer.’”

Although she faced significant personal risk for violating her non-disclosure agreement, Fleischmann still decided to speak up.

“I could be sued into bankruptcy,” she told the New York Daily Times shortly after. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”

In an article by the Corporate Crime Reporter, Fleischmann said her upbringing in a small British Columbian town played a big role in her decision to do what’s right.

“I think it was because I came from a small town — Terrace, B.C.” the article reads. “I was raised with this idea that ultimately you have to do the right thing. It was just simple things like, you can’t take money from people. We are talking about pension plans and retirement funds, things people are relying on at a time when they don’t have another income. I just grew up with a value that a lot of people have, and that is, it’s okay to do well, but you can’t do that at other people’s expense.”

It was those beliefs, combined with the personal risk she faced, that earned her the Wallenberg-Sugihara Courage Award earlier this year.

“Sometimes whistle blowers do what they do for less than altruistic motives,” said director Alan Le Fevre, “and they may not follow through. Some who attempt it are simply paid off to keep quiet.”

However, for Fleischmann it was different, he added, because she spoke up eight years after leaving the company with no aparent-personal gain.

“Many years after Alayne attempted to stop the fraud, it is clear she is committed to the bank’s clients,” he said.

The risks of being a whistle blower could include employer retaliation, industry blacklisting, professional violations, and legal consequences, he noted.

“There is always significant personal and professional risk in being a whistle blower against a large and powerful company or organization,” said Le Fevre.

And Fleischmann’s courage to face that risk was the other part that earned her the honour.

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