This program is mostly good, because there isn’t a better way to detect and therefore deter corporate crimes. However, over time the program has also been subo

This program is mostly good, because there isn’t a better way to detect and therefore deter corporate crimes. However, over time the program has also been suborned by former members of the SEC > The Wall Street Journal estimated that of more than 52,000 tips submitted to the agency in the decade to September 2021, just 0.5% resulted in awards. Critics grumble that the sec is less than transparent about the way it sorts tips and awards informants > Perhaps the gravest concern, however, is over a secondary business that is growing up alongside the sec process. In a forthcoming study Alexander Platt of the University of Kansas’s law school suggests that a handful of law firms, often staffed by former employees of the sec, are responsible for winning an outsize share of whistleblower awards. Those firms, in turn, often charge their whistleblower clients high legal fees, perhaps more than a third of the value of the eventual award. But informants who want their tips investigated may do well to hire them. Using data from 2012 to 2020, Mr Platt found that former sec regulators were involved in about one-third of cases where whistleblowers used attorneys. He reckons that about a quarter of all the money dispersed by the sec scheme has gone to recipients represented by law firms that have hired former staff from the agency. And that share appears to be growing: from 2021 to the middle of 2022, what he calls “revolving-door firms” raked in more than 40% of the funds awarded. One implication, finds Mr Platt, is that the arrangement risks looking unhealthily close. The Economist (https://archive.is/vwYXu https://archive.is/vwYXu)