Tiny Va. Bank First To Have Insider Trading Whistle-Blower



FLOYD, Va. – When lawmakers set out to protect investors from another Enron, they probably never imagined a company – or a controversy – like the one stirring inside this one-stoplight town’s namesake bank.

The Bank of Floyd’s board of directors amounts to a Who’s Who of local farmers, the Associated Press reports. Many days, not a single share of its stock changes hands. There are no corridors of power – bank President Leon Moore’s office isn’t far from the tellers’ windows.

But a fight between the no-profile bank and a former employee is the unlikely first test of an effort by Congress to protect corporate insiders who blow the whistle on financial trickery.

David Welch, fired from his $60,000-a-year job as the bank’s chief financial officer, is the first whistle-blower granted protection under the Sarbanes-Oxley Act, thanks to a little-noticed decision by a Department of Labor judge two weeks ago.

“I’m just a person who wanted to stand up and be counted, to stand up for what’s right,” Welch said. “And when I stood up, I got shot.”

On the surface, his allegations of accounting fraud and possible insider trading at a company with 600 shareholders shouldn’t matter to most people. But the matter is intensely important to people at its center. And to hear them talk, it should matter to others too. After all, they say, what happens the next time an ordinary worker at an ordinary company comes across figures and actions that just don’t seem to add up? When that happens, what is that worker, or his boss – or the government, for that matter – supposed to do?


Comments are closed.