False Claims, Not Securities Fraud: Towards Corporate Governance by Whistleblowers

Abstract:     
This paper, a contribution to an October 2009 symposium, "The 80th Anniversary of The Great Crash of 1929: Law, Markets, and The Role of The State," held at Chapman University School of Law, explores the role of whistleblowers in recent financial regulation reform efforts. The Investor Protection Act of 2009 (and later the Dodd-Frank Act) embrace the notion of whistleblower bounties for securities fraud tipsters. Although the suggested reforms fall short of the ideal approach, opportunities for innovative whistleblower litigation may already arise at the intersection of the economic stimulus and the 150-year-old federal False Claims Act (FCA). Since the government is now a shareholder, false claims to shareholders may already be actionable under the qui tam provisions of the FCA.

Number of Pages in PDF File: 12

Accepted Paper Series