The New SEC Whistleblower Proposal: Make It Fair, Make It Pay, And They Will Come

Buried deep within President Obama's historic new proposals to oversee and regulate the financial markets ("Financial Regulatory Reform, A New Foundation") is the outline of a provision that garnered no headlines but might well become the most effective new anti-fraud regulation of all: rewarding whistleblowers who disclose fraud cases to the United States Securities & Exchange Commission ("SEC"). It is surely the only part of the massive proposal that gives insiders with knowledge of wrongdoing a chance to speak up against, and even profit from, the types of financial and securities fraud that has infected the financial markets in recent years. This may be the beginning of the golden age of whistleblowing. Protecting whistleblowers and making their jobs easier is getting increased attention in Congress. While federal qui tam actions initiated by whistleblowers who report fraud against the government have been around for many years, the concept of rewarding those