A naukri.com initiative
Schneier
3w
162
AI and the SEC Whistleblower Program
- The U.S. SEC runs a whistleblower program that has paid out over $2 billion
- The program has attracted private for-profit whistleblower firms at the expense of staff at the SEC
- The SEC has paid as much as $279 million to an individual whistleblower – almost one-third of the funding of the agency’s entire enforcement division
- Whistleblower complaints can be used as weapons of corporate warfare, e.g. by rival companies and ransomware groups who threaten to tell the SEC
- The use of AI will increase the number of whistleblowers reporting potential violations, which will decrease the program's efficiency
- AI could lower the cost of whistleblowing firms and increase reliance on a few seasoned, trusted firms
- Firms could use AI to help cover up their own violations by deluging the SEC with legitimate, if minor, tips about potential wrongdoing throughout the industry
- Submitting whistleblower complaints to the SEC will continue to be a viable business model for as long as it remains profitable
- AI is not the solution to the problems created by the runaway growth, but it should give policymakers pause to reconsider the balance of public and private ownership of regulatory enforcement
- The real challenge is to reduce incentives of Tax farming and Whistleblower firms by exploring ways to increase direct government staffing and investment in regulatory enforcement
Read Full Article
9 Likes
For uninterrupted reading, download the app