Do Corporate Whistleblower Laws Deter Accounting Fraud?

Whistleblowers play a significant role in detecting corporate fraud. For example, recent high-profile financial frauds such as the Enron scandal and Bernard Madoff’s Ponzi scheme were brought to light by whistleblowers. To encourage more whistleblowers to come forward, the Securities and Exchange Commission (SEC) implemented in 2011 the Dodd-Frank whistleblower program, which provides enhanced protection and financial rewards to whistleblowers. According to the program’s 2016 annual report, the SEC received over 4,200 tips for the fiscal year 2016 and has awarded more than $111 million to 34 whistleblowers since the inception of this program.[1] In a recent paper, I … Read more