Privatizing State Power in International Finance

Abstract

This Article critically examines post-financial crisis whistleblower regimes and their impact on contemporary financial markets. In particular, the Dodd-Frank whistleblower program, as implemented by the United States Securities and Exchange Commission, has received significant attention in legal, political, and popular quarters. Some praise the whistleblower program as essential to aiding the government’s efforts in overcoming enforcement challenges, while others remain wary of the program’s unintended effects. This Article advances the debate — in favor of whistleblowers — by offering an updated analysis of the program’s benefits and costs, in light of recent trends in complexity and innovation that have made financial activity much more diffuse.By weighing the program’s utility in the postcrisis financial landscape, together with its benefits and costs, this Article argues that the SEC whistleblower program is, on balance, desirable: not only because whistleblower solutions can be effective at detecting financial misconduct in complex financial spaces, but also because they serve other valuable social and economic goals. Overall, the aim of this Article is to prompt further conversation about whistleblower programs by critically examining the crux of regulators’ need for whistleblowers in the financial services arena, revisiting a conceptual cost-benefit analysis of the program, and suggesting certain aspects of the SEC program that are ripe for revaluation and, potentially, redesign.