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April 7, 2016 By Richard Bowen

Silence is Deadly. Lessons Learned.

Richard Bowen
Photographer: Nancy Bouton

The audience was primarily internal auditors at my presentation this week at the 11th Annual Fraud Summit, held at the University of Texas at Dallas, where I teach, sponsored by the Institute of Internal Auditors, the Association of Certified Fraud Examiners, and Information Systems Audit and Control Association.

I talked about fraud and how as internal auditors there is a clear responsibility on our part to question what we see, if there is doubt, if something is not quite right, if something is not adding up. I mentioned that a large part of the financial crisis could have been avoided if the banks had followed their own published ethics policies and listened to their employees. And the fact that all of the large financial institutions which had either failed or been bailed out during the 2008 debacle had been given clean audit opinions, including Lehman Bros, Bear Stearns, Washington Mutual, Fannie Mae and Citigroup.

Richard Bowen
Photographer: Nancy Bouton

I asked, what about the auditors? Were they asleep at the switch or just plain stupid? Why did they not question if they had any doubts. And why did the banks and employees not follow their ethics policies? As the famous Dr. Dan Ariely, Duke University Professor and best-selling author, has observed, even if there is exposure to and training in ethics and codes of codes of conduct, if companies don’t truly expect people to act ethically, then you won’t get ethical behavior. The very lack of ethics and transparency certainly contributed to the problems.

I noted that I was quoted in the New York Times as saying that I believe corruption extends to the highest levels of government and that the large banks have a stranglehold on our country, and told them that the large banks were systematically gutting the provisions of Dodd-Frank which specifically relate to them.

I talked about my experience at Citi, told them of the many reports showing the breakdowns of internal controls which were not given to internal auditing as they should have been. And the out-of-policy risk conditions I’d repeatedly warned about also were not given to corporate risk and audit.

Richard Bowen
The audience members were engaged and asked several questions. Photographer: Nancy Bouton

The list went on as I related the many instances where internal auditing, while performing their ’06 year-end audit, had stumbled over mortgage transactions resulting from senior management reversing my underwriters’ decisions on a large scale, allowing Citi to purchase huge pools of defective mortgages. I told them how our internal auditors had accepted the lame excuses management gave them and did not investigate further. And, I explained how auditing would have discovered some of the fraudulent activity going on if only they had asked further questions and probed deeper.

Of course, I mentioned my requesting a Congressional investigation and that many senators and members of congress on key committees were stonewalling my request. And I let them know about Bank Whistleblowers United and about our platform to return the rule of law to banking. I made them aware of the newly released Financial Crisis Inquiry Commission papers from the National Archives, the Rubin criminal referral and the second Citigroup criminal referral based solely on my testimony and evidence, and my concern at how little has been in the media about this.

It is silence that allows an organization to bend the rules. Silence on the part of the auditors, who know better, or who may have a slight doubt yet there is nothing illegal they can put their finger on, but they sense something is not quite right. Silence on the part of employees who may be afraid for their jobs. Silence on the part of management who may be individually profiting from the actions the company is taking.

I reminded them of their responsibility; that they have an obligation to call out when rules were being bent and they saw actions that might lead to another financial meltdown because of malfeasance, a mistake or just plain stupidity. It is silence that may lead to another financial crisis and so we must be vocal and loud and insistent in calling out financial wrongdoing that ultimately affects us all.

[tweetthis]”Silence may lead to another #financialcrisis. It’s time to be vocal!” ~ @RichardMBowen #2008[/tweetthis]

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Tagged With: Citi, Ethics, Financial Crisis, fraud, Wall Street, whistleblowing

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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

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William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59-05:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
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Eileen McDonnell"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
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"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
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2014-12-28T19:48:17-06:00
"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
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Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
2014-12-28T19:48:06-06:00
"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://richardmbowen.com/testimonials/533/

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"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
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fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

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2014-12-28T19:47:22-06:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
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Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

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Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

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