Massachusetts Stiffs Putnam Whistle-Blower

"I'm writing a book, and I'm a stay-at-home dad," says Scannell. He's been shunned by the securities industry. "It cost me my career, it cost me and my family an enormous amount of stress. I got bashed over the head with a brick. I'm always looking over my shoulder."

Massachusetts has a law, passed in 2000, which says whistleblowers are entitled to up to 30% of the state fines resulting from a scandal they expose.

In the case of Putnam, those fines came to $50 million.

But Tom Reilly, who was Massachusetts' attorney general until a few months ago, refused to give Scannell a penny, on the grounds that he didn't submit the proper paperwork in the proper manner. A judge backed up Reilly. Martha Coakley, Reilly's successor, is so far taking the same line.

It's that position that Scannell and his lawyer are appealing on Tuesday. It's probably his last chance for justice.

What happens in court will say a lot.

Because this case isn't just about Peter Scannell. It's about encouraging future whistle-blowers to come forward, so we can expose scandals and protect investors.

That is, after all, the reason the law was passed.

I can positively guarantee you that right now, someone somewhere is stealing some of your savings. It's a 100% certainty. There are scandals, big and small, within public companies, public markets and investment firms all the time.

And there are people who know about them and are wondering whether to speak up. What happens in the Scannell case is going to influence them one way or another.