Article by Stephen Hasegawa published in Private Funds Management, 8/6/14.
The Dodd-Frank Act brought greater regulation and greater Securities and Exchange Commission (SEC) scrutiny over the private equity industry. One of the lesser-known consequences of that legislation, however, is the increased likelihood that insiders will blow the whistle on any hidden practices or transactions that may violate SEC rules.
That’s because of the incentives Dodd-Frank offers whistleblowers. While the examinations the SEC’s Office of Compliance Inspections and Examinations is conducting in the private-equity industry are an important enforcement tool, the whistleblower incentives created by Dodd-Frank may prove to be just as valuable.