Great news for whistleblower Mauro Botta

RSM US LLP has given Botta a second chance as a Senior Director in its National Office

There’s some great news today via LinkedIn:

RSM is showing the rest of the accounting industry what it means to stand up for those who speak up.

On Nov. 15 Tom Fox at the FCPA Compliance Report, visited with Mary Inman, a partner at Constantine Cannon who runs that firm’s International Whistleblower practice from London. Inman quoted IRS whistleblower Charlie Middleton who said one of the best things you can do at a company to signal encouragement of whistleblowing, to signal that it is virtuous, is to hire a former whistleblower.

We’ve seen few others have the same success.

Anthony Menendez is a former EY auditor, CPA, CFE and the former Halliburton Director of Technical Accounting Research and Training. In The Whistleblower’s Tale: How An Accountant Took on Halliburton we learn how “in 2005, Tony Menendez blew the whistle on Halliburton’s accounting practices. The fight cost him nine years of his life.” Menedez fought Halliburton and won. He is now the George A. Dasaro Clinical Assistant Professor of Accounting in the College of Business Administration at Loyola Marymount University in Los Angeles.

Bravo to Loyola Marymount!

One Big 4 firm has rewarded some whistleblowers who put their careers on the line by calling out fellow partners for criminal activity.

KPMG partner Diana Kunz contacted her supervisors, John Rodi and Dave Marino, who co-led the Chicago office, who then contacted another senior partner Laurie Mullen, when Brian Sweet told her that one of her engagements had been approved for PCAOB inspection. Sweet had not only explained why the client had been selected but also what the focus areas were for the PCAOB’s upcoming inspection cycle. The audit was still in progress and staff were still conducting fieldwork.

Marino testified during the trial of his colleague David Middendorf:

It was clear to me that if she was going to be getting notification at that point in time while the audit was ongoing, that we had information in advance that we should not be privy to under any circumstance...Because we would never be notified from a regulator that there was going to be an inspection of an engagement while that engagement was still being executed.

Diana Kunz is now KPMG’s U.S. Financial Services Audit Practice Leader. Mullen retired in October 2020 at normal retirement age. Rodi began his 30th year at KPMG in 2021 and Marino began his 38th year at KPMG in 2021.

Bravo to KPMG for believing these professionals, but I wonder why the firm does not want to shout about it to the rooftops?

Mauro Botta went through hell for blowing the whistle on PwC to the SEC, after getting no satisfaction making internal complaints. He reported several issues to the SEC and PCAOB that he sincerely believed indicated PwC was violating securities laws, including auditor independence rules. He sued PwC for an alleged retaliatory termination after he was fired. On July 26, 2021 Judge Alex Tse filed his decision in the Northern District of CA in the Botta v. PwC case.

The undersigned presided and now explains why judgment will be entered for the defendant, PricewaterhouseCoopers LLP (PwC).

I wrote quite a bit about Botta’s case.

In Part 1 I wrote about how well I believed Botta had made his claims and how PwC chose to defend itself. Botta v. PwC: An analysis of the trial so far

In Part II I wrote about what happens when an abused partner finally feels empowered. Botta v. PwC Part II: A very bad relationship that could have ended better

Here’s an exclusive video interview I did with Botta.

An exclusive interview with auditing whistleblower Mauro Botta

Here’s to RSM and Mauro Botta and my hope that this is a fresh start for Botta, one where he can use his considerable technical skills and experience for the benefit of shareholders and capital markets globally.

A spokesperson from RSM did not respond to a request for comment before press time. Mauro Botta declined a request for comment.

© Francine McKenna, The Digging Company LLC, 2021