The much-heralded, yet severely questionable Dodd-Frank financial regulation bill, recently enacted, has well over a thousand pages of do-good intentions. And lots of unintended consequences.
Take what goes for the awards that can be given to help the SEC uncover fraud from tips given with the offer of bounties.
It sounds good. Discover fraud and advise the SEC. You get a cash prize. It can be as much as 30% of imposed penalties and recovered funds. We’re talking millions of dollars.
However, with so much prize money available: How many employees will direct fraud for normal, conventional internal corporate correction, as is done in the vast majority of business all the time?
On the other hand: What pressures will ensue for internal corporate blackmail? How many frivolous suits by enterprising lawyers will commence, where corporations may be intimidated to settle?
Expect the Dodd-Frank regulation to open up a new sweepstakes for enterprising analysts who can image fraud in every balance sheet and every accounting footnote.
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