To Crack Down on Securities Fraud, States Reward Whistle-Blowers
ByIn the aftermath of the financial crisis, a growing army of confidential informants — better known as whistle-blowers — has helped federal securities regulators identify and prosecute wrongdoers.
Now the same thing is happening at the state level: Securities regulators in two states (so far) are enlisting the aid of these informants to enforce their own fraud statutes and protect residents from financial harm. And the whistle-blowers are reaping rewards.
On Aug. 19, for example, an informant was awarded $95,000 for helping Indiana securities regulators bring an enforcement action against JPMorgan Chase for failing to disclose certain conflicts of interest to clients about the way the bank invested their money. The monetary award was the first given under that state’s whistle-blower program aimed at securities law violators…
To Crack Down on Securities Fraud, States Reward Whistle-Blowers
