Ok, I have found out about an employee that has been written into a customer's will. She did not like the customer at all and was only nice to her because of her money. Come to find out, the employee stands to inherit 1/4 of $3 million. This new accounts employee is extremely two faced and would call the Feds herself if another employee was doing what she is going to do. She knows she can't take the money but she is going to take it to court and fight it. The lady has a sister and some other family so it is not as if she had no one to leave her money to. I am in charge of compliance so can anyone help me know what I need to do? I am not supposed to know any of this and was told in strict confidence.

Whistleblower...ethics violation.

Elder abuse?


Even tho you were told in "strict confidence" you and the person who told you have a fiduciary responsiblity to report this. It sounds like misuse of position, which is SAR-worthy, as well as a violation of your code of conduct.

do not allow yourself to be in a position to be a "party to the crime".

Where do I go from here? I will have absolutely NO backing from the CEO or Ex VP. If I don't get any support from them on compliance issues of a smaller sort, this will surely never budge them. It is like there are a few lifetime employees here and they run the place. The CEO doesn't want to buck the system, instead of making it the other way around.

Does your Board have an Audit Committee? If so, I would go to the Chair of this committee or to your Auditor.

When the family goes public with their lawsuit against the teller, does the CEO and EVP really want to sit on their hands or be proactive now considering this will probably be front page headlines?? This is a lot of money and is not going to be easily swept under the carpet and I would not be surprised if the bank is not also named in the suit for allowing employees to act in an unethical manner.

The employee's defense is that she has always been friends with and helped the lady, but what came first, the chicken or the egg? I knew the lady as well and she was a very difficult person to know, on all levels. I just find it hard to believe she never told the employee that she stood to inherit the cash. The lady expected special treatment because of her money and everyone knew it.
I don't even know if the CEO and ExVP know about any of this. I intend to find out but I just want to have my ducks in a row. I am brand new to this job and this institution and I have unknowingly jumped off into a boiling pot!

Out of our CoC
CODE OF CONDUCT VIOLATIONS
Any employee who violates any section of this Code of Conduct is subject to disciplinary action up to and including termination. Suspicions of Code of Conduct violations and/or other criminal activity or business abuses should be reported immediately to a member of Senior Management, the Human Resources Director, the Internal Auditor, the Company’s Counsel or in accordance with the Whistle Blower Procedures, as defined below. Copies of all reported suspicions and violations of the Code of Conduct shall be delivered to the Chairman of the Audit Committee.
ESTATE MATTERS
Without the approval of a member of Senior Management after consultation with legal counsel, an employee or the employee’s spouse or child may not accept any benefit under a will or trust instrument of a customer of the Company with a value greater than $1,000 unless the customer is a member of the employee’s family. An employee may never demand, request or solicit any benefit under a will or trust instrument of a customer of the Company.

Without the approval of a member of Senior Management after consultation with legal counsel, an employee or the employee’s spouse or child may not act in any fiduciary capacity under a will, trust, or other instrument of a customer of the Company unless the customer is a member of the employee’s family.




CONFLICT OF INTEREST
A financial institution’s reputation for integrity is its most valuable asset and can be affected by the conduct of its employees. For this reason, employees must not use their position for private gain, to advance personal interests, or to obtain favors or benefits for themselves, members of their families, or any other affiliated individuals, corporations or business entities.

Check yours.

The facts offered clearly do not reflect an unbiased point of view. Regardless, the would-be-decedent can change her will tomorrow with or without notice to the interested parties; the issue simply isn't mature.

Debating what the bank might do when the big day comes might be entertaining, but as far as what it can do now: Nothing.

How do you figure that the facts are not unbiased?

The woman is dead and her will is active. Just because I know the employee would call the Feds herself if it was anyone else has nothing to do with maturity, it has to do with me knowing the woman and her character. I was hired to do a job here and I want to make sure I am following correct procedures. I would be no less concerned if the employee was my best friend. So as far as maturity, I feel more mature to follow the law and uphold the position for which I was hired to fill.

You did not state that the woman was deceased. You also stated that you were brand new to the institution. Did the employee see the woman outside of work? Is there a family connection?

I think you need to have a meeting with your Senior Management and your Legal Counsel.

Best advice here.... the whole situation seems little, unstable, to me.

Sorry, I just implied it.

The employee did see the customer outside of the bank, but it is because of her relationship with the bank. She wasn't able to get around very well and so when documents needed to be signed, the employee would take them to her. They are no relation to each other. I just don't want the bank to get into trouble over this. I also don't want to be caught in the middle of this myself for being part of compliance and not practicing what I preach.

I just received a training DVD from BOL titled Ethics in Banking. It addresses this issue. Maybe it can help you. Good Luck.

That means the problem is not ripe; i.e. a solution is being sought for a problem that does not yet exist. As there wasn't any indication that the lady died, that was true. Now, it's been offered that she is dead.

If the will has been filed for probate there is absolutely nothing that is confidential about this situation. Before you chase this rabbit I suggest you get a copy of it at the court house.

If the probated will contains a provision in favor of a bank employee you should make senior management aware of it. You should do that without regard to whether you think you will agree with their handling of the situation.

Your bank may have a public relations problem with the rest of the family. If your bank has a written ethics policy that addresses this issue, you may have a beef with the employee. If you do not have such a policy, then you do not have a beef with the employee, only a black eye.

Courts set aside testamentary provisions when it is clear that someone's influence over the decedent was so strong that the beneficiary overpowered the desires of the testator. They do not set them aside because the beneficiary's relationship with the decedent did not merit the gift. Even if the court decides the decedent was subjected to undue influence by your bank's employee, that would not make it a crime.

Any theoretical "liability" your bank might have would be based on an argument that it did not provide its employees with adequate ethical guidance and supervision. If the court does not set aside the bequest, that argument would be pretty thin. Even if all of the facts stated are accurate, there is no violation of law or regulation here.

I agree with Ken. The employee isn't breaking the law, but your banks ethics policy. Was she trained? Is there a signed statement from her that it was agreed to and understood? And if the employee gets this money, you won't have to fire her. She'll quit and bank elsewhere. If it is fought in court by the family, your banks name will likely be displayed in an unfavorable light.

Depending on your position in the bank, it likely isn't your responsibility to resolve this issue, but bring it to management's attention.

Regulatory compliance and ethics are separate issues. I doubt your job description places you in charge of creating, maintaining, or enforcing your bank's ethics policy, so don't worry about it in the same way you would worry about violations of law. Very likely, you have the same basic obligation as all other employees - behave ethically and report (to a policy-specified person) situations such as this. Do what you think your policy requires of all employees, including your senior managers, and then get back to work.

If there is a conflict of interest in your bank's code of conduct, there are two choices: enforce it or ignore it.

If you enforce it, there are two choices - the employee will terminate: her inheritance in the will or her employment at the bank.

If you ignore it, there are two things which may occur: the family (and potentially the press) will make a note of it, and/or you will encourage other employees to do the same.

In a small bank such as mine, Compliance is responsible for creating, maintaining and enforcing the Code of Ethics policy. This may be anon's case as well.

I worked with a lady once (new accounts, trust, safe deposit box entry, etc.) who always waiting on a very difficult elderly man and woman. She waited on them because they sought her out. She was always professional and courteous even though the couple drove her nuts with extreme demands and a bit of arrogance. the couple had two grown children who wanted to control every dime of the couples money (their future inheritance). Once the son called and asked how much his mother spent on her new car. They always called our lady employee knowing that she always waited on their parents. The elderly man died and soon after the elderly wife. Our lady employee was named in the will (much to her surprise) and as you guessed the family had a FIT! The elderly lady left our employee money and a ring. The ring had not been handed down through the family and had little value. The money was substantial and the will stated the employee had done such a good job protecting it from the family, the employee should have it. Don't get me wrong, the amount of money left to the employee was tiny compared to the total estate. The elderly woman wanted to repay the employee and "dig" at her children for being greedy. A mediation was held between attorneys and it was decided the amount of money was left than XX% of the total estate and the children would not win if they challeneged the will. The lady employee donated the money to the elderly couples favorite charity on behalf of the couple with the bank presenting the check. Turned out ok and the children weren't so angry anymore either. Just wanted to share a feel good story.

Also, renniks, you are so very correct. I was also one who had to create, implement, maintain, and enforce most all policies, laws, and regs. I needed a gun and a badge!

Have a nice day!