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SEC whistleblower rules

Daniel Fisher notes that the new SEC whistleblower rules, which incentivize employees to dodge internal reporting (often at cross-purposes with that required by Sarbanes-Oxley) to instead seek windfalls, is going to overwhelm SEC staff with false leads, making real fraud detection less likely. Tonya Mitchem Grindon, writing for WLF, suggests internal whistleblower awards to compete with those the SEC offers, though one wonders about the astronomical compliance costs that that would create—especially given the threat of employment-law liability for retaliation against whistleblowers that already overincentivizes spurious reporting.

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.