Financial Incentives for Whistleblowers in European Capital Markets Law? Legal Policy Considerations on the Reform of the Market Abuse Regime

European Company Law (ECL), Vol. 9, No. 5, pp. 250-259, 2012

Max Planck Private Law Research Paper No. 12/19

Posted: 31 Oct 2012

See all articles by Holger Fleischer

Holger Fleischer

Max Planck Institute for Comparative and International Private Law

Klaus Ulrich Schmolke

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: August 5, 2012

Abstract

The European Commission has recently released a Proposal for a Regulation on market abuse, to increase investor confidence and market integrity in European capital markets law. One of its most innovative elements involves allowing Member States to provide financial incentives to whistleblowers who report cases of market abuse. In this, the Commission has apparently drawn inspiration from the US legislation, which with the Dodd Frank Act of 2010, significantly expanded its whistleblower reward programme. This article examines both the US and the European regulations, and evaluates the advantages and disadvantages of offering financial incentives to encourage informants to blow the whistle. Finally, it looks at the potential structure of a reward programme, examining the balance required between external rewards and internal company compliance processes.

Keywords: whistleblowing, regulation market abuse, financial reward for informants, European capital market

Suggested Citation

Fleischer, Holger and Schmolke, Klaus Ulrich, Financial Incentives for Whistleblowers in European Capital Markets Law? Legal Policy Considerations on the Reform of the Market Abuse Regime (August 5, 2012). European Company Law (ECL), Vol. 9, No. 5, pp. 250-259, 2012; Max Planck Private Law Research Paper No. 12/19. Available at SSRN: https://ssrn.com/abstract=2162454

Holger Fleischer (Contact Author)

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, 20148
Germany

Klaus Ulrich Schmolke

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Law School ( email )

91054, Erlangen
Germany

HOME PAGE: http://www.wr2.jura.uni-erlangen.de/

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