Essay On Whistleblower: Massmutual | Bill Lloyd

Type of paper: Essay

Topic: Business, Products, Company, Marketing, Fraud, Bad Faith, White Collar Crime, Market

Pages: 2

Words: 550

Published: 2020/10/03

MassMutual: A Background

Last July 27, 2014, the Securities and Exchange Commission (SEC) of the United States announced on its website that it has yet to award US$400,000 to a corporate whistleblower for reporting fraud to the department (SEC, 2014). This is after the company he was working for failed to address the issue internally.
According to the New York Times writer Joe Nocera, the announcement referred to Bill Lloyd who was in his mid-50’s and had spent 22 years working for the insurance company MassMutual Financial Group as an agent (Nocera, 2014). He was supposedly a high-performing employee with stellar performance and one who cares about his clients.
In 2007, around September, MassMutual added a new feature to their annuity products in order to attract more investors. They called these the Guaranteed Income Benefit Plus6 and Guaranteed Income Benefit Plus 5. These supposedly guaranteed that the annuity income stream would increase to a set cap, regardless of how the market and, consequently, the investment would fare. Upon the investor’s retirement, they had the option to take 6% (or 5%) of the cap for as long as the investors would prefer to or until such time that the fund runs out, all the while being able to annuitize it. The scheme had a tendency to be unclear but it gave the impression that it will never run out. This is how the sales guys had marketed it and sold it off to the general public. It did well in the market, and MassMutual saw the fund rise up to as much as US$2.5 billion.
However, Lloyd, along with some other employees, had learned that the products could not live up to their promises and could potentially not deliver. Because of the market’s downturn, it was even possible that the fund would run out of money in 7 or 8 years.
This concerned Lloyd, but he did not report this to SEC upfront. He tried to run it down with MassMutual. At the start, it actually looked like Lloyd and MassMutual were going to address the issue internally. However, the files that Lloyd put together were supposedly stolen from his office and reached the Financial Industry Regulatory Authority. Lloyd’s lawyer then advised him to bring his case to the SEC. After a long and thorough investigation, MassMutual agreed to pay due fines and introduced changes to the company and the said products.

Bill Lloyd, The Whistleblower

Lloyd lived with integrity and was clear about what was right or wrong – even if it meant he was temporarily ostracized by his colleagues and friends. This didn’t deter him from moving forward and reporting the discrepancy to the SEC in order to protect the money of clients, many of whom he hasn’t even met. It can also be noted that Lloyd was quite critical as he challenged the products that were given to them as agents. Had he just accepted the details of the product as gospel truth, then he wouldn’t have discovered the irregularities around them. It was Lloyd’s critical thinking and integrity that led him to report the discrepancy in the SEC.
Lloyd was adequately working with MassMutual before he brought it to the SEC. He gave the company he was working for enough consideration and time to resolve the issues internally. Therefore, he arguably gave ample chance for the company to correct the irregularities in their products. Even though he must have been stressed while going through all this, Lloyd can have the peace of mind that for these kinds of cases, the Sarbanes-Oxley (SOX) Act can protect whistleblowers like him (Sarbanes-Oxley Act, 2002). SOX has a section (Sec. 806. Protection for employees of publicly-traded companies who provide evidence of fraud) that grants criminal penalties for retaliation against whistleblowers. This is definitely an incentive on top of the monetary grants he had received.


Nocera, Joe (2014, August 18). The man who blew the whistle. Retrieved from
SEC. (2014, July 31). SEC Announces award for whistleblower who reported fraud
Sarbanes-Oxley Act (2002). Retrieved from

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Essay On Whistleblower: Massmutual | Bill Lloyd. Free Essay Examples - Published Oct 03, 2020. Accessed January 30, 2023.

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