President Obama signed into law the Wall Street reform bill. 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. 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 Times writes the provision makes certain citizens “provide the Securities and Exchange Commission with original details that reveals the fraud and leads to a successful recovery,”. Lawmakers hope this provision could be enough to help give strength to Wall Street although numerous see some troubles with the plan. Businesses will start having issues when employees go to the SEC instead of internal management with things they see. There also could be a whole new slew of lawsuits that may have to be dealt with as well. It is going to result in a “society of paid informants” no matter what as outlined by Walter Olson of the Cato Institute.
‘Fast’ cash for the 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 had turned in the tip leading to Goldman Sachs’ censure, that whistle-blower would have made at least $ 55 million in instant cash loan. Taxpayers get back some of the money Stephen Kohn of the Washington-based National Whistleblowers Center explains. ”Quick cash” tends to be relative of course. Getting the money will settle even if a whistle blower has to wait through the gruesome legal proceedings. 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
