This is a bit of a click-baity article title. He went broke because he assumed he was getting a payout and did stupid things.<p>From the bottom of article:<p>Early in the Life Partners saga, Mr. McPherson was so beguiled by the lure of whistleblower millions that he essentially quit his day job to become a full-time whistleblower, using his accounting and life-insurance knowledge to spot potential miscreants...In 2018, he took out a $1 million litigation-funding loan at very high interest rates, secured by the Life Partners whistleblower claims, to pay back taxes and continue to pursue his cases.
This sends a bad message to would-be whistleblowers. I read it as... "next time, take your evidence, make contingency plans, and finally blackmail the criminals - you're more likely to get paid".
I get that there is no money from the penalty so he can't get paid from that but he should at least get paid for his expenses and time. After all, his help was invaluable to the case. There needs to be a minimum payout. I bet all the lawyers got paid from the recovered funds so he should get his share from that.
What is less clear to me is why he borrowed so much money to setup this business? The debt had as much or more to do with his going broke than the flawed whistleblower process. As with many things in life this is a cautionary tale about not counting on something before it’s done.
I read the original WSJ. I guess the tricky moral question is: were the investors partially culpable for the crime, or blameless victims? You can say "they should have been more diligent" but are you equally willing to apply that standard to ALL fraud victims? Example:<p>You moved into an unsafe apartment building that collapsed snd killed you -- "too bad, you should have checked it out better! The signs were there."<p>Bernie Madoff ran a Ponzi scheme and paid early investors with the funds of later ones. The early people who benefited from the fraud were forced to disgorge their "investment returns" and some of that money was returned to the later ones. So was that "justice?" Should the whistleblower have gotten some of that?<p>Not easy questions. Don't be too quick to take sides.
I would think the SEC fines would be senior to investors, but it seems the SEC never filed to recover them in bankruptcy court. As noted pedophile Woody Allen once said, 80% of success in life is showing up.
Or... to look at it another way, when there isn't enough money left in a company, harmed investors are paid first, then whistleblowers/government fines.<p>That seems right to me...
3 trillion for covid relief like nothing. Why not set aside just a miniscule amount for whistle-blowers? Getting the govt. To geta payout is like prying open a bear trap.