7 ms·

> Then you should have signed up for an undercover investigator position Why though? Is this a moral judgement against whistleblowing as a profession, or somet

> Then you should have signed up for an undercover investigator position Why though? Is this a moral judgement against whistleblowing as a profession, or something? I expect that offering whistleblower rewards is a much more scalable and effective way to discover frauds than employing a standing army of investigators.

fastball 5y ago
The problem here is that he leveraged himself and pursued a case which resulted in bankruptcy which makes it hard for the SEC to collect a fine that they can disburse part of to the whistleblower. Whistleblower rewards are great, but they must have limits, and he bumped into them here (while highly leveraging himself).
- modeless 5y ago
  No, the problem here is that the whistleblower reward program is less effective than it should be because payouts are divorced from the effectiveness of the whistleblowing. If you set up a program that is supposed to reward a specific behavior, and then you don't actually reward that behavior, that is a problem. As I said, the leveraging he did is mainly a problem for the lender, who is now out $1m, not him.
dataflow 5y ago
> Why though? One reason being that then you have a strong financial incentive to "whistleblow" on things that are less clear-cut, making it likely that (a) you'll eventually harm innocent people in the process, and (b) you'll inject too much noise/unnecessary work into the system. As a rough analogy, imagine someone calling to report an impaired driver they encountered by pure happenstance, vs. someone who made it their personal full-time career to just go around on roads finding people he can report. I'm not sure if you see a difference but I certainly do.
- viscanti 5y ago
  Was he harming innocent people? Was he injecting too much noise/unnecessary work into the system? I don't see how him doing it as more of a freelance thing rather than an undercover position guarantees a different outcome. It seems like we have to look at the actual outcome and we can't paint with such broad strokes about how one model or the other is better.
  - dataflow 5y ago
    > Was he harming innocent people? Was he injecting too much noise/unnecessary work into the system? It doesn't matter because we don't base societal incentives on 1 guy.
    - robertlagrant 5y ago
      What you're saying seems to be based on nothing.
      - dataflow 5y ago
        Yeah, it's not like financial social incentives have any history of inflicting collateral damage or anything of that sort. I'm just imagining things.
- darawk 5y ago
  > One reason being that then you have a strong financial incentive to "whistleblow" on things that are less clear-cut, making it likely that (a) you'll eventually harm innocent people in the process, and (b) you'll inject too much noise/unnecessary work into the system. It's not like a whistle blowing claim just results in enforcement action without investigation. The claim gets investigated by the relevant agency first, and then if and only if it is found to be justified is an enforcement action taken. That enforcement action can then be challenged in the courts, too, if the entity in question perceives the agency to be in the wrong. I don't think there's much risk of whistle blowers significantly harming innocent companies here.
  - dataflow 5y ago
    Do you see any difference with the impaired driving analogy? Or with someone spending 40h/week just walking around calling the cops every time they see some dude do something that looks appears illegal to them? If we don't even agree on those it's going to be too much effort to argue...
- passivate 5y ago
  Yeah, that is a great point. Often, we don't consider the unintended consequences of policies.
- robertlagrant 5y ago
  Exactly. Or imagine people spending their time finding security flaws and collecting bug bounties as a career instead of just reporting security issues whenever they occasionally happened upon them.
bee_rider 5y ago
What's the point of whistleblowing? I thought it was to provide a framework for people who've come across shady behavior on the part of their employer in the execution of their day-to-day work. So, I guess it is more scalable because it is operating under the assumption that the whistleblowers were receiving their normal paycheck while "investigating." Certainly no negative moral judgement on people intentionally going for those bounties, fighting corruption is admirable. But the system is probably not calibrated to provide for their their day-to-day expenses or the cases where their investigations aren't successful. If it were, it would be equivalent to just employing that army of investigators (just, without any official organization, so it'd miss out on any benefits from legal authority or economies of scale).
mcguire 5y ago
No moral judgement, it's just risky. As he discovered, you may not get the big payout, for any number of reasons. If you expect to make a living at anything, you have to be prepared to manage the risks that go along with it.
deleted 5y ago
[deleted]

fastball 5y ago

The problem here is that he leveraged himself and pursued a case which resulted in bankruptcy which makes it hard for the SEC to collect a fine that they can disburse part of to the whistleblower. Whistleblower rewards are great, but they must have limits, and he bumped into them here (while highly leveraging himself).

modeless 5y ago
No, the problem here is that the whistleblower reward program is less effective than it should be because payouts are divorced from the effectiveness of the whistleblowing. If you set up a program that is supposed to reward a specific behavior, and then you don't actually reward that behavior, that is a problem. As I said, the leveraging he did is mainly a problem for the lender, who is now out $1m, not him.

dataflow 5y ago

> Why though? One reason being that then you have a strong financial incentive to "whistleblow" on things that are less clear-cut, making it likely that (a) you'll eventually harm innocent people in the process, and (b) you'll inject too much noise/unnecessary work into the system. As a rough analogy, imagine someone calling to report an impaired driver they encountered by pure happenstance, vs. someone who made it their personal full-time career to just go around on roads finding people he can report. I'm not sure if you see a difference but I certainly do.

viscanti 5y ago
Was he harming innocent people? Was he injecting too much noise/unnecessary work into the system? I don't see how him doing it as more of a freelance thing rather than an undercover position guarantees a different outcome. It seems like we have to look at the actual outcome and we can't paint with such broad strokes about how one model or the other is better.
- dataflow 5y ago
  > Was he harming innocent people? Was he injecting too much noise/unnecessary work into the system? It doesn't matter because we don't base societal incentives on 1 guy.
  - robertlagrant 5y ago
    What you're saying seems to be based on nothing.
    - dataflow 5y ago
      Yeah, it's not like financial social incentives have any history of inflicting collateral damage or anything of that sort. I'm just imagining things.
darawk 5y ago
> One reason being that then you have a strong financial incentive to "whistleblow" on things that are less clear-cut, making it likely that (a) you'll eventually harm innocent people in the process, and (b) you'll inject too much noise/unnecessary work into the system. It's not like a whistle blowing claim just results in enforcement action without investigation. The claim gets investigated by the relevant agency first, and then if and only if it is found to be justified is an enforcement action taken. That enforcement action can then be challenged in the courts, too, if the entity in question perceives the agency to be in the wrong. I don't think there's much risk of whistle blowers significantly harming innocent companies here.
- dataflow 5y ago
  Do you see any difference with the impaired driving analogy? Or with someone spending 40h/week just walking around calling the cops every time they see some dude do something that looks appears illegal to them? If we don't even agree on those it's going to be too much effort to argue...
passivate 5y ago
Yeah, that is a great point. Often, we don't consider the unintended consequences of policies.
robertlagrant 5y ago
Exactly. Or imagine people spending their time finding security flaws and collecting bug bounties as a career instead of just reporting security issues whenever they occasionally happened upon them.

bee_rider 5y ago

What's the point of whistleblowing? I thought it was to provide a framework for people who've come across shady behavior on the part of their employer in the execution of their day-to-day work. So, I guess it is more scalable because it is operating under the assumption that the whistleblowers were receiving their normal paycheck while "investigating." Certainly no negative moral judgement on people intentionally going for those bounties, fighting corruption is admirable. But the system is probably not calibrated to provide for their their day-to-day expenses or the cases where their investigations aren't successful. If it were, it would be equivalent to just employing that army of investigators (just, without any official organization, so it'd miss out on any benefits from legal authority or economies of scale).

mcguire 5y ago

No moral judgement, it's just risky. As he discovered, you may not get the big payout, for any number of reasons. If you expect to make a living at anything, you have to be prepared to manage the risks that go along with it.

deleted 5y ago

[deleted]