Overseen by the Securities and Exchange Commission (SEC), the whistleblower program set up by the Dodd-Frank Act offers rewards to individuals who provide tips that lead to sanctions. Whistleblower activity is up, partly due to large rewards the SEC has paid out.
Now, a top prosecutor at the Department of Justice (DOJ) has stated that the tips have been helping in criminal prosecutions. According to The Wall Street Journal, Jeffrey Knox, chief of the fraud department of the DOJ’s criminal division, the program has helped increase the quality of tips used by prosecutors.
Individuals who submit tips to the SEC frequently give the same information to the DOJ, the SEC can also pass along pertinent information to the DOJ when applicable. Knox stated that this has led to tips that are clearer and more reliable, when compared to previous methods of collecting information, such as anonymous emails. Now, the tips are vetted by lawyers, who often submit supporting documents and information to the DOJ.
There are, of course, concerns about the program. Some wonder whether the rewards incentivize the tipsters, causing them to deliver tips directly to the government rather than working through internal channels first. Also, until the $14 million payout in the fall of 2013, many were afraid that the program itself was not working, as it had not generated a great deal of reward-worthy tips in the early stages of its existence.
Still, the purpose of the program is to dissuade corruption in the financial sector, and making it easier for prosecutors to get the bad guys is certainly a step in the right direction. Couple the rewards that spur tips and the efficient prosecution of wrongdoers, and the whistleblower program is on the right track toward making corruption a thing of the past.
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