Wednesday, September 22, 2010

Will Whistle-Blowing Be Millions Well Spent?

Excerpts via Forbes.
Dodd-Frank is about to make whistle-blowers filthy rich. That's a mistake.
Sometimes the best intentions make the worst laws. This may be the case with the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act. A provision of the Act that rewards whistle-blowers who provide the Securities and Exchange Commission ("SEC") with information relating to securities laws violations may present more headaches than viable information for regulators investigating violations.
Under the Act, the whistle-blower could be a foreign official or foreign agent. If the SEC were required to make a 20 million whistle-blower payment to a foreign official, what would the political ramifications be? Foreign officials may find whistle-blower rewards a source of revenue worthy of reporting on colleagues or agents.
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