An informer is a very unpopular figure. Most people see them as underhanded petty traitors. But we face many cases in modern society where knowledgeable people -inside people- may assume a civil duty to uncover sordid frauds and other delictive acts. They are presently known not as "informers" but as "whistleblowers", an euphemism that has a more palatable flavor. However, being a whistleblower entailed up to now risking lots of reprisals and problems and practically no rewards. Therefore, it is good to know that a new US law contemplates a proper reward for those that endanger their careers and sometimes their own lives to uncover what is wrong in their environment and/or work. Cunning and crafty swindlers beware!
Sept.8.─ The Wall Street Journal reported that a newly enacted whistle blower award program initiated by the Dodd-Frank law spurred a surge in tips supplied to the Securities and Exchange Commission
The awards to people who provide “original information” could receive up to 30% of the penalties associated with the frauds uncovered and penalties levied.
Stephen Cohen of the SEC said that they have received “…very high-quality tips".
The article did not cite any recent examples of rewards paid out to whistleblowers.
Also absent from the article was any reference to the role that Compliance and internal regulatory professionals may play in this new environment. The incentive of a bounty on penalties could encourage employees to bypass the existing compliance and internal regulatory framework and head straight to the SEC with their information, reducing the effectiveness of the in-house Compliance department.
Recent penalties enacted by the SEC have amounted to $550 million paid by Goldman Sachs and ...
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