Subject: File No. DF Title IX - Whistleblower
From: John Johns, B.Commerce (NZ)
Affiliation: Former External Auditor, Former Chartered Accountant, New Zealand (ICANZ) Former Finance Planning Manager of Shell Malaysia Limited (UK)

May 17, 2011

Mr. John Johns
Suite 110, MBE
LG K1, Bangsar village
No 1. Jalan Telawi Satu,
Bangsar Baru, Kuala Lumpur
Malaysia 59100.

May 17, 2011

Elizabeth M. Murphy,
Secretary Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: File No. DF-Title IX-Whistleblower Award Program

Dear Ms. Murphy:
I write this short note to express my deep concern over the GRAMM bill - it needs to be rejected in full in relation to the above whistle blower award program.

I write this as a New Zealander, and in my capacity as a former investor who suffered losses on shares in Royal Dutch / Shell s "Oil Reserves Scandal" of 2004.

As a former Shell Transport and Trading investor and later Royal Dutch Shell plc investor have not seen one cent from that Oil Company for the many secret abuses hidden for years by its senior management directors and that only came to light in that company scandal in 2004 and to which your SEC fined them for market abuse some US$120million in 2004.

I sold my shares in disgust in 2006. Why risk all my capital?

To this end I have setup a NGO called RDS forensics which aims to bring information about Shell and its stated Core Values of honesty, integrity and respect for people.

As a former Shell shareholder this NGO aims to assist Shell with keeping to those Core Values after it plainly lost its way and cost it some US$120 million in SEC fines let alone the harm and suffering from public and investors alike and the proposed Euro 450 million shareholder settlement.

Further as I am a Finance Professional of some 20 years, and a former external auditor of a Big Five Audit Company, I should have the expert skills more than most to avoid such scandals as the Royal Dutch Shell 2004 scandal yet I lost money in Royal Dutch Shell shares.

Further I was myself employed by Shell for 15 years and have insights into the financial systems of your second largest public company.

More on that later.

These facts maybe of value in determining whether to allow the GRAMM bill , with its mandatory in house whistle blowing law a very strange act and not one seen in any other law such as house /property law, family law, and torts and negligence.

All have a right to freedom of speech and laws of natural justice which includes impartial courts and judges something the GRAMM bill is not offering any whistleblower.

That GRAMM bill is in effect gagging whistleblowers. This is a most disturbing step for the SEC to consider. It must be rejected and as a person who lost money in Royal Dutch Shell over their Oil Reserves Scandal, had the news been out of oil reserves falsification, as an investor and finance professional knowing future cash flows determine value, I would have sold my shares, employee or not and not have suffered the losses caused by the apparent gagging in that Company until 2004.

This shows what hope for a normal investor without my 20 years expertise?

Such supports the case for independent SEC whistleblower access in the first case and not a mandatory internal program with the Corporate.

The Royal Dutch Shell Oil Reserve case was shocking. I have yet to receive any worthwhile financial compensation from Royal Dutch Shell, some 8 years later.

The facts are plain to all. Royal Dutch Shell, as the second biggest listed firm on the NYSE today, clearly fired in, March 2004, its Chairman and a CEO and removed its CFO over what were shocking insider abuses.

Shell had its own programs in-house yet they were ineffective to the power of its most senior employee the Chairman and all his people who effectively caused massive investors losses and panic.

Your own office fined that Royal Dutch Shell company some US$120 million and put a cease and desist court order in place.

If the second biggest company on your US stock market failed then all strength is needed to ensure independent investigations are run and by SEC which I believe is both the best solution and a grave deterrent.

I oppose the proposed "Gramm" bill to make it mandatory to report internally to the Company first.

There are many cases where reporting internally to a 'support' group is in effect a death warrant to one's financial career in that firm and likely others there after.

Clearly Shell emails show such facts. Its most senior CEO had emails which plainly showed words and evidence of 'sick and tired of lying' and 'fooling the market' as seen from submissions in the USA cases put before the US courts and widely reported to the media. These were at the highest levels of Royal Dutch Shell, one of the largest companies in the world.

Can we trust such a Corporate now to be suddenly independent and trustworthy?
Companies today are heavily focused on 'brand' value, often worth billions. The idea that a Company would go to the market with damaging information is unrealistic and indeed foolish.

Further as a former external auditor I know that Companies have a duty to report losses and frauds and theft.

As a former external auditor Fraud is the responsibility of management and not the auditors. This places more vital importance of ensuring management is kept honest by the fear that secret willful misconduct could be put to the SEC at any time.

As a financial professional I cannot imagine any such professional 'inventing' false claims and or racing to the SEC first. Typically in the Companies worked in there is a common good among employees to gather the facts behind the rumors and to then adduce the evidence.

Even then grace is often allowed until it acts are repeated and abused and that is the time most financial professionals would act by moving to an independent reporting body - with extreme caution and with a case that is well documented and supported.

With the SEC as the stick to whack corporates with, much simple work can save a large company from a scandal that often only involves a small group of senior management and to which the Company is not dependent upon. No one employee is indispensable. CEOs come and go all the time.

Royal Dutch Shell is a good case in point. The Chairman and a CEO was removed, the CFO was moved out and the Company today appears to be good health.

No one is irreplaceable in a capitalist company where the profit motive means to remove anyone deliberately incurring costs, losses, fraud and waste. That is coming from employees pensions, investors and customers and few employees would let such matters continue relentlessly.

Yet to mandate by the GRAMM bill, to keep whistle blowing inside in the first instance is a sure way to allow further losses, cover up and fraud to continue.

This is a curse on the share markets and upon investors like my fellow finance professionals and myself.

To have employees keeping all whistle blowing inside is like making a witness to a crime to first tell the robber's buddies and not the police. There is no fear the power is given to the very group who are mostly likely to have bonuses and share options and pensions driving them to cover up.

Indeed America and the Global corporate world is heavily connected and dependent upon information. To have critical data suppressed, and delayed by internal 'investigations' where these investigators are mere employees looking for a long employment and nice bonus and pension is placing at risk the Corporate worlds hidden value.

With honest, transparent whistle blowing the crimes will be struck quickly and while they are small.

Had Enron been blown early would not have the firm been saved rather than lost?

With this 'fear factor' upon senior management - of a truly independent SEC investigators arriving at the Corporate HQ door - would not this immediately make these senior management people abide by the very Company policies and Corporate laws? And that let us not forget that these same people in management are the ones that often sign off the accounts and disclosure statements each year for investors like myself.

Financial information needs to be honest and truthful to the latest second.

Currently the value of the Corporates has risk factored in for false and unreliable data. Russia and China are examples in point.

The cost to investors and the markets is in the billions as this capital is either never seen to its proper potential and valuation as it is siphoned away into vested interests and deep corrupt pockets.

Further the markets are shaken by 'corporate disasters' that were not often unknown to the very senior management employed to protect those corporate investors.

Again Royal Dutch /Shell Oil Reserves shows that the internal whistleblower program would have no value under the GRAMM bill.

In that case in Royal Dutch / Shell the Chairman, is it shown from internal emails, had already known for some five years of the concerns. Further the senior Chairman Sir Phil Watts knew of the overvaluations and was attempting, it appears to force his CEOs to abide by such "false" valuations.

IF the SEC allows the GRAMM bill SEC could be allowing Corporates to simply machine gun any whistleblower out of the firm while suppressing the facts.

Is this the way to dig the USA out of a recession?

I say no. Tricksters and fraudsters acting as proper directors of public companies, taking false bonuses and salaries gains, need to be sent a clear message.

Already your good office has stated that it is very hard to get a good insider close to the frauds.

The SEC is one of the few who can enforce this program.

This clearly supports the cost of Enron, WorldCom and other tales of disaster, including even in EU / UK where Royal Dutch / Shell, with the motto "You can be sure of Shell' was struck down by a massive fraud on shareholders.

Such leads to massive losses, where as a Shell Transport shareholder, my shares dipped in value, and this was totally unknown to myself.

The SEC has the right idea. The small cost paid out to the occasional whistleblower is immaterial compared to the saving from seeing the newspapers reeling from corporate disaster day in and day out.

It has been proven, that in this day , few can be trusted, that in the past one hundred years trust and integrity has been eroded and a love of money, as the Bible says is the root of all evil.

Cash is the same whether robbed from a bank or robbed from a Corporate. The intent is the same and the motives are the same. To take illegal gains not allowed.

The SEC is guardian of a trillion dollar industries financial system.

It needs teeth and iron teeth to start to put a stop to the idea of getting a job in a Corporate and looting it.

Let the fraudsters be pushed out of Corporates and let them resort to robbing banks instead. At least banks have armed guards and real bullets. Their DNA will not prosper.

The current draft of the law is SEC's best attempt at real bullets and it will work. That is the simple drive for the GRAMM bill to stop it.

That the GRAMM bill is no more than a last minute 'abuse of process' attempt to influence the SEC to cut out core protection, in this day and age of rapid corporate misdeeds and willful misconduct by the most senior management of public companies - witness the removal of the Chairman of Sir Phil Watts, from Royal Dutch /Shell in 2004,

The Gramm bill will merely see more corporate scandals not less.

The people proposing the bill do not represent the bulk of the investors. - Normal people worldwide who are making the best informed decisions upon the Corporate information in the market at that time, and who are putting their monthly salaries, pension contributions and hard earned cash into the US stock exchanges.

No I fear that the sponsors of the GRAMM bill are no more than the overpaid lawyers who specialize in defending white collar criminals and paid by Corporate senior managers who have an interest access to paying lobby groups to water down such basic protections of our right to real information and not false financial statements on the US stock market.

The Gramm bill represents the very worst of legal drafting.

Internal reporting does not work, cannot work and has never prevented any large loss.

Corporate brands are worth too much to now put any such 'mandatory' "tell the boss's secretary' kind of corporate whistleblower program.

Further there is no standard but a mix of home grown non standardized and clearly weak in house corporate whistleblower programs. Each with their own weaknesses and abuses.

Further they are all non independent by virtue of being paid by the Company - whether outsourced or not - and open to corruption in these 'new' 'whistleblower hot lines' we see today.

I fear they are more about data capture of who knows what rather than the core platform for restoring trust in Corporate America.

Has any success been championed in these in house whistleblower programs? I have not seen any championed and certainly most scandals show abuses of corporate programs from Enron to Royal Dutch Shell's 'sick and tired of lying' emails.

Such mandatory corporate internal reporting should not be laid down in this new Act. It cannot be the first back stop in this game of investing our trillions of hard earned cash into the US stock markets.

There is no standards for it, there is proven cases of abuses and retaliation and eroding the call lines to mere clerks.

Using the much evidence in the Royal Dutch / Shell Group "Oil Reserves Scandal'" the internal reserve audit was manned by one part time former employee who had some Billions to assess and assert over the board table while facing down CEO's on some USD1 million each.

Further the CFO of Shell Upstream , Mr. Frank Coopman, received emails, the press has clearly reported of 'destroy' the legal reports that Mr. Coopman , one of the top CFO's felt duty bound to obtain to support his case.

Can there be anymore a clear case for interference in internal mandatory corporate whistle blowing that that?

As a Royal Dutch Shell plc shareholder in 2005 I was shocked to see this and to believe that such a large corporate where highly paid finance experts where pushed around by the CEOs.

I sold my shares in 2006 and have not returned to such investments as it is simply too risky. At least a house investor does not lie to me nor have the ability to force me to only deal with him if I find the house was built on improper foundations or on quick sand - the police is on hand in such cases of fraud

Where does the GRAMM get such 'rights' to shut down proper independent investigations that the USA was built upon? The GRAMM bill is a serious erosion of our investors rights to free speech and justice.

The film Ghost busters comes to light here..."Who are you going to call?". Even in the age of fictional spirits they didn't trust " fellow ghosts" but the busters....

If SEC is to keep rebuilding the trust over the billions lost in Enron, WorldCom, Royal Dutch Shell and now in the Investment Banks scandals of recent times, only independent investigators with no mandatory in house laws will work start to rebuild the wall and to restore trust in the markets.

Since the Shell Transport and Trading fiasco I have decided to not invest in the stock market. Further I have not received one cent from Royal Dutch Shell plc. despite their promises of a US$450 million payout.

The Gramm bill must be rejected to help restore faith in the information being put before the markets and investors and to protect financial investors like myself from abuse by large Corporates listed on the US markets.

I move the SEC to adopt the whistleblower provisions as they stand and to reject the amendments of the GRAMM bill in total.

Finally more disclosure. I was fired by Shell Malaysia Limited (a UK 1911 year incorporated company), on 31st March 2003 from my position as Finance Planning Manager , Shell Aviation business group. My termination matter is still in contention and before legal courts.

That occurred one full year before the Oil Reserves Scandal of 2004.

Yet this is not about myself but about my capacity as a Royal Dutch Shareholder when on 9th January 2004 Shell announced a 20% write down of its financial reserves, worth some 100 billion US$.

That is about valuable information that was withheld from the market and to which the SEC fined that company.

For the record I did not sell my Shell shares until 2006.

Yet I was shocked in 2004 to see the Royal Dutch Shell Oil Reserves scandal erupt to which, as a Shell shareholder.

At that material time I was no longer an employee of Shell on a US$100,000 per year salary yet I was fully unaware of such scandals until, like many other Shell shareholders we were all caught out by a few Directors and the Chairman of Shell.

Many staff were left with large losses and shock.

Such shows how even in house financial experts/ shareholders such as myself with some 15 years in Shell were kept from material wrongdoing and facts in the Oil Reserves Scandal in Royal Dutch Shell facts that the market should have been given years earlier.

Such shows the power of secrecy and what must have been clear threats that can operate in todays Corporates,

Such dispels any brave hope of other Companies effecting proper in house mandatory whistleblower programs.

To this end I have setup a NGO called RDS forensics which aims to bring Shell to the public investors with its stated Core Values of honesty, integrity and respect for people.

As a former Shell shareholder this NGO aims to assist Shell with keeping to those Core values after it plainly lost it's way and cost it some US$120 million in SEC fines let alone the harm and suffering from public and investors alike and the proposed Euro 450 million settlement.

This is good evidence to not allow the GRAMM bill which is in effect asking that the SEC allow first mandatory corporate self policing by the GRAMM Bill. This must be rejected in full.

The SEC - not the Companies is the proper first vehicle for whistleblower programs and enforcement and reward programs.

Justice must be not only done but seen to be done is an often-used quote of an esteemed Judge.

Yet the GRAMM bill is asking the SEC to allow Corporates to be the police, prosecutor and judge in their own trials of their reputation and wrongdoing.

This has no basis in any other law of property, family, negligence or other tort.

The GRAMM bill, of mandatory in house whistle blowing is a serious breech of legal rights of freedom of speech and basic laws of justice.

SEC should reject the GRAMM bill in total for the above title.

Should the SEC wish to obtain more information I can be contacted on my email account below.

Signed (by email)

Mr. John C. Johns