BETTER BOUNTY HUNTING: HOW THE SEC'S NEW WHISTLEBLOWER PROGRAM CHANGES THE SECURITIES FRAUD CLASS ACTION DEBATE
In: Northwestern University Law Review, Jg. 108 (2014-07-01), S. 1235
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Introduction "Fraud-on-the-market" (FOTM) securities class actions have been under sustained attack. 1 Congress dealt them a major blow by enacting the Private Securities Litigation Reform Act of 1995 (PSLRA), 2 and the courts have been whittling away at them for decades. 3 Last year, four Supreme Court Justices went so far as to suggest it is time to reconsider Basic v. Levinson, the case that gave FOTM class actions life, 4 and the Court has since granted certiorari in a case that presents it with such an opportunity. 5 Scholars, for their part, have grown increasingly critical of FOTM class actions. 6 None seriously defend them as a compensatory tool, and many question their deterrence benefits. But professors are cautious types, and academic proposals to eliminate the FOTM class action have tended to be conditional on concurrent changes to the U.S. securities fraud enforcement regime - changes that would compensate for any loss in deterrence that might result from their elimination. This Article demonstrates that the new Whistleblower Bounty Program (WBP) created by the Dodd-Frank Wall Street Reform and Consumer Protection Act is the proverbial nail in the FOTM class action coffin. 7 The WBP mandates that the Securities and Exchange Commission (SEC) pay significant financial rewards to eligible individuals who voluntarily provide the agency with original information about securities law violations if that information leads to an enforcement action resulting in $ 1 million or more in sanctions. The program has prompted a firestorm of controversy, ...
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BETTER BOUNTY HUNTING: HOW THE SEC'S NEW WHISTLEBLOWER PROGRAM CHANGES THE SECURITIES FRAUD CLASS ACTION DEBATE
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Autor/in / Beteiligte Person: | Rose, Amanda M. |
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Zeitschrift: | Northwestern University Law Review, Jg. 108 (2014-07-01), S. 1235 |
Veröffentlichung: | 2014 |
Medientyp: | academicJournal |
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