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A new study from the University of Iowa demonstrates for the first time that financial misdeeds at companies decrease markedly in the years after whistle-blowers come forward with information about wrongdoing inside their operations, according to a Saturday editorial in the New York Times. New research by Jaron H. Wilde, an assistant professor of accounting at the University of Iowa’s Tippie College of Business, found a sharp and lasting drop in financial wrongdoing at companies that were subject to whistle-blower investigations. The whistle-blower program at the Securities and Exchange Commission heard from 4,218 tipsters in fiscal 2016, up 40 percent from the number who came forward in 2012. The SEC has awarded $136 million to 37 whistle-blowers since its program’s inception in 2011; it says that enforcement actions arising out of these tips have resulted in almost $900 million in financial remedies, much of which went to wronged investors.

As public and congressional pressure mounted on Wells Fargo & Co. executives, its top two bankers had an explanation Tuesday for allegedly illegal sales practices across the company: It was employees’ fault, the Wall Street Journal reported today. Chief Executive John Stumpf defended the firm and the efforts it had taken to stop the behavior, which included opening accounts for customers without permission. “There was no incentive to do bad things,” Stumpf said. He called the conduct that led to last week’s settlement with federal and local authorities “not acceptable,” adding that the bank doesn’t “want one dime of income that’s not earned properly.” At the same time, the San Francisco bank said that it would soon eliminate the practices at the center of the controversy: branch-level sales goals that encouraged employees to cross-sell products to customers. Last week, Wells Fargo paid a $185 million fine to regulators, including the U.S. Consumer Financial Protection Bureau, after findings that many accounts were falsified or forced on unsuspecting customers.

In one of the U.S. Securities and Exchange Commission's biggest cases tied to the 2008 financial crisis, former Fannie Mae Chief Executive Daniel Mudd has reached a settlement with regulators, Reuters reported yesterday. The deal with the SEC, detailed in papers filed in Manhattan federal court, resolves a 2011 lawsuit accusing Mudd of misleading investors about Fannie's exposure to risky mortgages before the crisis. Mudd had denied wrongdoing and he did not admit any in yesterday’s agreement. The deal concludes one of the SEC's few remaining cases tied to the housing downturn. Mudd was one of six executives at mortgage funding giants Fannie Mae and Freddie Mac sued by the SEC. The prosecutions were announced at a press conference in December 2011 but they ended in modest settlements over the following years.