Whistleblowers Hit Jackpot Thanks to New Finance Law

Get ready for a nation of SEC-loving paid informants
By Kevin Spak,  Newser Staff
Posted Jul 23, 2010 11:11 AM CDT
The new financial reform law provides a hefty incentive to whistle blowers.   (Shutterstock)

(Newser) – The new financial reform law contains a little-noticed provision that could do a lot to clean up Wall Street—a whistleblower incentive. Under the new law, anyone who provides “original information” that leads to a successful SEC fraud case will be entitled to 10% to 30% of whatever fines or settlements the government exacts from the company, the LA Times reports.

One Washington lawyer predicts the law will “have an immediate impact,” incentivizing insiders to step forward. “It is the secret weapon in this massive bill,” she said. But some fear employees will run to the SEC instead of addressing problems through internal channels. “I’m skeptical,” says one libertarian scholar. “Congress sees this as free money, but do we want to live in a society with paid informants everywhere?” (Read more whistleblower stories.)

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