New US whistleblowing incentives within the Dodd-Frank financial reform act – that could net informants multimillion dollar pay-outs – are likely to generate a surge in allegations against US-listed companies and Wall Street banks, lawyers say.
The Securities and Exchange Commission is expecting a sharp increase in tip-offs from senior employees and third parties prompted by potential seven-figure bounties.This, I remind you, is the same SEC that snuck into the Dodd-Frank Bill a clause that exempts it from the Freedom of Information Act.
“The scale of the awards reflects the high quality of whistleblower we hope to get – people within a company, broker or other regulated firm that we might not have heard from before,” Stephen Cohen, an SEC official, told the Financial Times. “We’re expecting a tremendous response."
The substantive new financial incentives for securities fraud whistleblowers are part of the sweeping Wall Street reforms that became law last month.
People who provide original information that leads to a successful SEC enforcement action will now be entitled to 10 per cent to 30 per cent of any sanction imposed over $1m – including a share of the proceeds from any related regulatory action or shareholders’ lawsuit
The same SEC that is protecting the name of the former high level SEC attorney who spent ALL Day surfing porn sites at tax payer expense.
Then, of course, there is the absurdity of most insider trading charges anyway (See Tibor Machan What is Morally Right With Insider Trading [PDF])
On top of all this, the idea of paying informants (especially for a non-crime), mimics the old Soviet Union, where it was never clear who was an informant for the state. It could have been your neighbor, a co-worker or your best friend. In the old Soviet Union, you always had to censor yourself for fear of an informant who might misinterpret what you said in front of him. A country of informants is a country that is fast losing its freedom. There are few things as suffocating of life as a country full of informants. The SEC step , through the Dodd-Frank Bill, of aggressive informant seeking takes us one more step down the road toward the all watchful state. It's pure evil.
Add to that the "transparency" talk by the chief googleman: "...true transparency and no anonymity. ...it is too dangerous for there not to be some way to identify you. We need a [verified] name service for people. Governments will demand it."
ReplyDeleteAnyone feeling "too endangered" on the net right now, please sound off. So far we have one: Mr. Eric E. Schmidt.
http://www.readwriteweb.com/archives/google_ceo_schmidt_people_arent_ready_for_the_tech.php
At least in USSR one didn't have to carry ID at all times. Now a solution is found to that problem: networked gadgets and sensors that can identify one at all times.
After the demise of USSR, people were found in Siberian taiga who lived there since before the war. They just left and lived their entire lives there totally disconnected from society, never to be found. And that's USSR, where everyone had an ID since birth, a registered residence, etc. Looks like USSR may have to be reclassified as a towering beacon of freedom in not so distant future. Now that's something to feel endangered about.