Understanding the SEC Whistleblower Program
The reason that the sec whistleblower program was implemented was to curb illegal activities as it pertains to the stock market. Insider trading affects everyone involved in trading, from big corporations down the the smallest of investors. Here are a few reasons why this program is currently effective at stopping those who are looking to game the system.
Higher Maintenance Costs
When a person or company illegally benefits from insider trading, the end result is everyone else has to foot the bill. The costs to buy and sell stocks goes up, the sot to maintain accounts goes up, and the end result is everyone's portfolio makes less money to cover the loss. The SEC Whistleblower Program was implemented to stop this from getting out of control. When a company is caught insider trading, they suffer a significant penalty, including jail time. In the past, many people thought they were too smart to be caught, but now with so many people watching, it can really make things more difficult for those thieves.
The Huge Reward
One of the reasons the criminals are thinking twice about insider trading is because if you are turned in, that person receives a huge reward as a result. Turning in someone who has scammed the system of millions stands to gain hundreds of thousands of dollars in reward money. This means the criminals can not trust anyone anymore, and they are very hesitant to even try to fraud the system. The SEC Whistleblower Program rewards those who step up and turn in those committing crimes, and rewards them big time for their service.
Higher Maintenance Costs
When a person or company illegally benefits from insider trading, the end result is everyone else has to foot the bill. The costs to buy and sell stocks goes up, the sot to maintain accounts goes up, and the end result is everyone's portfolio makes less money to cover the loss. The SEC Whistleblower Program was implemented to stop this from getting out of control. When a company is caught insider trading, they suffer a significant penalty, including jail time. In the past, many people thought they were too smart to be caught, but now with so many people watching, it can really make things more difficult for those thieves.
The Huge Reward
One of the reasons the criminals are thinking twice about insider trading is because if you are turned in, that person receives a huge reward as a result. Turning in someone who has scammed the system of millions stands to gain hundreds of thousands of dollars in reward money. This means the criminals can not trust anyone anymore, and they are very hesitant to even try to fraud the system. The SEC Whistleblower Program rewards those who step up and turn in those committing crimes, and rewards them big time for their service.