The Wall Street reform bill has been signed into law by President Obama. Yet the vast majority of those who support the Obama administration’s call for tighter regulation of banking and investment are probably unaware of a whistle-blower provision, reports the Los Angeles Times. A private sector of individuals who stop rule breaking will get 10 to 30 percent of the money the government gets from these fines and settlements.
A whistle-blower provision to catch Ponzi and insider trading schemes
The whistle-blower provision calls for the citizen “provide the Securities and Exchange Commission with original info that reveals the fraud and leads to a successful recovery,” writes the Times. Lawmakers hope the bounty provision will provide the necessary incentive to strengthen Wall Street reform, but some legal experts see potential issues. Someone who spots a problem will go to the SEC than to management which could possibly be a problem for many companies. There also may be a whole new slew of lawsuits that may have to be dealt with as well. In both cases, a “society of paid informants,” as Walter Olson of the Cato Institute puts it, would be the result.
’Fast’ cash incentive for whistle blowers
Imagine if this whistle-blower provision had been in place when Goldman Sachs settled with the SEC for $ 550 million. If a whistle-blower had turned in the tip leading to Goldman Sachs’ censure, that whistle-blower would have made at least $ 55 million in cash until payday. That’s money going back to the taxpayer, points out Stephen Kohn of the Washington-based National Whistleblowers Center. ”Quick cash” tends to be relative of course. Long legal proceedings will follow, but if whistle-blowers’ tips pay down, they’ll have their cash loan when the government collects from the guilty corporation. $ 1 million could have to be recovered before the whistle-blower provision could be able to become an informant.
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Los Angeles Times
latimes.com/business/la-fi-reform-whistleblower-20100723,0,6099636.story
An example of whistle-blowing in high government
youtube.com/watch?v=xq8aopATYyw
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