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Holder calls for increased whistleblower rewards

By WTOP Staff

ERIC TUCKER
Associated Press

WASHINGTON (AP) — The Justice Department expects to bring criminal charges in the coming months in investigations involving financial institutions, Attorney General Eric Holder said Wednesday as he called for better incentives for Wall Street whistleblowers who report crime.

Holder did not describe the investigations in a speech at New York University’s law school except to say that they’re “focused on the conduct of individuals” and involve wrongdoing that has undermined the financial markets.

He used the address to urge Congress to raise a cap on the amount of money a whistleblower can receive for reporting misconduct. Such cooperation is essential since financial criminals are often “savvy enough to avoid using email” and witnesses from within the firm may be the only ones who can provide the “smoking gun” evidence needed for a conviction, he said.

The whistleblower provision of the Financial Institutions Reform, Recovery, and Enforcement Act — a law passed after the savings-and-loan crisis of the 1980s — caps whistleblower rewards at $1.6 million. But Holder said that was a “paltry sum” given the amount of money made in the industry and probably not enough to encourage a whistleblower to risk his job by cooperating with the government.

That amount should be raised, he said, perhaps to be more in line with the False Claims Act, which allows whistleblowers to obtain up to a third of the amount of money recovered by the government in any settlement.

“This could significantly improve the Justice Department’s ability to gather evidence of wrongdoing while complex financial crimes are still in progress — making it easier to complete investigations and to stop misconduct before it becomes so widespread that it foments the next crisis,” Holder said in prepared remarks.

The Justice Department has faced criticism for not being aggressive enough in prosecuting financial misconduct, especially arising from the economic meltdown that left millions of American in foreclosure. In the last year, Holder sought to rebut the criticism with multibillion-dollar civil settlements with JPMorgan Chase & Co, Citigroup and Bank of America, but those deals did not involve criminal charges for individual executives.

Holder defended his record against financial fraud, saying the Justice Department has brought more than 60 cases against financial institutions since 2009, but he also acknowledged that prosecuting individuals has been more challenging.

“This has been a source of frustration for the public for a long time. I understand and share that frustration,” he said.

Eugene Goldman, a former Securities and Exchange Commission enforcement lawyer, said the Justice Department has already had some success bringing cases with the cap as it is. He said he expects Congress will note that the statute, known as FIRREA, already includes an anti-retaliation provision.

“Congress will be in need of evidence that it’s necessary for the caps to be raised. Their review of the issue will take quite some time,” Goldman said.

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Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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