There is now a bounty on white collar criminals, potentially a large one.
The Securities and Exchange Commission today approved rules that would reward individuals who provide substantive information about violations of the federal securities laws.
The rule is among the most controversial regulations to come out The Dodd–Frank Wall Street Reform and Consumer Protection Act. Critics say the rule will give employees incentive to report problems directly to the SEC for a big payday instead of reporting them internally first and giving management a chance to try and address them.
Under the rule, whistleblowers whose information leads to enforcement action are entitled to take 10% to 30% of the penalty the SEC collects over $1 million. Before this rule, the SEC’s reward program was limited to insider trading cases and the amount of an award was capped at 10 percent of the penalties collected in the action.
This is a great idea, in my opinion. It gives people a good incentive to turn in these crooks and I like the idea of finally taking white collar crime seriously to warrant this.
