The Wall Street reform bill was signed into law by the President. Anybody who has support in this bill probably do not learn about the whistle-blower provision of it yet, reports the Los Angeles Times. This bounty provision entitles private sector individuals who blow the whistle on rule-breaking organizations to receive 10 to 30 percent of money the federal government obtains from fines and settlements.
Whistle-blower provision meant to stop insider trading and Ponzi
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 be a problem for numerous companies. There also can be a whole new slew of lawsuits that will 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
Think about what would have happened if this provision was here when Goldman Sachs settled with 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 quick cash. Stephen Kohn of the Washington-based National Whistleblowers Center says the money gets back to all the taxpayers. ”Quick cash” tends to be relative of course. Although a whistle blower could have to wait till the legal proceedings are through, money received might be paying down. However, the government must recover at least $ 1 million for the whistle-blower provision to go into effect for an informant.
More details on this topic
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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