November 5, 2010
By David E. Kovel
The top U.S. commodity regulator will review algorithmic trading and other practices The Dodd-Frank Wall Street Reform and Consumer Protection Act is now law.
Those who have charged the Obama administration and Congress with being hostile to free-market enterprise may take heart from a nugget in the bill. Deep within its thousands of pages it encourages whistleblowers to identify securities or commodities fraud by allowing them to share in the recoveries obtained from the information they provide. These provisions modify the Commodities Exchange Act. They don't create new bases for liability, but they do acknowledge, implicitly, that agencies can't do all the work and that it's therefore necessary to encourage civilian participation. Just how do you get such participation? By using the basic capitalist tool of financial reward. Whistleblowers who provide information of a fraud to the Securities and Exchange Commission or the Commodity Futures Trading Commission can receive 10% to 30% of the recovery when there are sanctions of more than $1 million...
Read Full Article on Forbes.
Last Updated: November 5, 2010