The Wall Street reform bill has been signed into law by President Obama. The Los Angeles Times reports that the whistle-blower provision of the bill is something those who support the bill probably do not know about yet. 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 needs the citizen “provide the Securities and Exchange Commission with original information 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 difficulties. Somebody who spots a problem will go to the SEC than to management which could be a problem for many companies. There also can be a whole new slew of lawsuits that could have to be dealt with also. Walter Olson says that either way, a “society of paid informants” could be the result.
Trying to get ‘fast’ cash as a whistle blower
It would have been very interesting if this provision had been here while the SEC and Goldman Sachs settled for $ 550 million. If a whistle blower turned a tip in about that, $ 55 million in quick cash could have effortlessly been made. Stephen Kohn of the Washington-based National Whistleblowers Center says the money gets back to all the taxpayers. Of course, “quick cash” is a relative term. Long legal proceedings will follow, but if whistle-blowers’ tips settle, they’ll have their cash today when the government collects from the guilty corporation. However, the government must recover at least $ 1 million for the whistle-blower provision to go into effect for an informant.
Discover more info 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
