
Featured case: Through the Eyes of a Whistle-Blower
The case |
Who – the protagonistsSherry Hunt, Vice President and Chief Underwriter at CitiMortgage. Raised in rural Michigan, she had built a long and successful career in the mortgage business, priding herself on working hard and following the rules. What?Citigroup was a multinational financial services company. It was the sixth largest residential lender in the United States in 2004 (when Sherry Hunt joined) and rapidly growing. ![]() Why?The company bought billions of dollars in mortgage loans from external lenders that did not meet Citi credit policy and sold them to government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac. The loans were defective and likely to default. Citi had also approved hundreds of millions of dollars’ worth of defective mortgages files for US Federal Housing Administration insurance.
When?
By 2007, Citigroup executives were being warned about a serious lack of compliance and a breakdown in internal controls that could lead to severe financial losses for the organisation. By 2011, Sherry had been witnessing fraud at Citi for a number of years. Her efforts to rectify the situation included regular reports about mortgage defects to her superiors and anonymous tips on the FBI’s and Department of Housing and Urban Development’s websites.
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Through the Eyes of a Whistle-Blower: How Sherry Hunt Spoke Up About CitiBank’s Mortgage Fraud
Teaching note |
The authors |
![]() Adam Waytz and Vasilia KilibardaAdam and Vasilia discuss their case which won the United Nations Global Compact PRME Outstanding Case Study on Anti-Corruption 2014. Whistle-blower role models
Vasilia: When we stumbled upon a Bloomberg article about Sherry Hunt, we thought the richness and complexity of her story would make the perfect example for students to dive into. She graciously agreed to contribute to what she felt was a good cause: educating future business leaders. Bringing the story to lifeVasilia: During our interviews with Sherry, we asked her questions about how she felt during this period of time – what worried her, what trade-offs she was weighing in her mind, and what motivated her. Relevant and meaningful details help bring a story to life in a reader’s mind – just like reading about a character in a novel! Conversely, it’s important to be selective about the information you include as too many details can drown and disengage the reader.
Combating unethical behaviour
Adam: We identified characteristics that contributed to a culture in which unethical behaviour could thrive at Citibank. These can exist anywhere, and various steps can be taken to create environments that don’t foster such behaviour:
Unique video materialVasilia: One great thing about this case is the videos that accompany it, which instructors have access to on Vimeo. These are the only on-camera interviews Sherry Hunt has ever given, and she did so because she believed in the importance of future business leaders learning from her experience. Seeing and hearing from Sherry herself is a great way to engage students during class discussion. It’s the next best thing to having her as a guest speaker in your classroom! About the authors
Adam Waytz is Associate Professor of Management and Organization
Vasilia Kilibarda is Manager of Case Writing at Kellogg School of Management. |