Learn the Law Before Signing NDAs, Filing Class Actions

Barry Ritholtz:

“I would say more, but I don’t want somebody knocking on my door and asking for $50,000 back. It’s almost like bribery; I felt that I was supposed to sign the agreement, take the money and keep all their secrets.”
-former Freddie Mac employee who worked on internal financial controls.
I find this fascinating: Some people simply do not understand basic contractual freedoms between consenting adults. Others do not understand the concept of ethics. And, they want the free lunch, no personal responsibility, having it both ways. They want the money but not the obligations it comes with.
Sorry, that ain’t how it works.
Here’s the story: Former Freddie Mac employees, who upon departing FMC, were required to sign nondisclosure agreements (NDAs) as part of the severance package. These employees are now being requested to violate those agreements in civil — not criminal — litigation. Under the law, you cannot privately contract not to answer questions from government prosecutors and investigators in any criminal case or in a regulatory proceeding. Really smart class action lawyers try to get a criminal case going simultaneously.

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