It is often claimed that rewards for whistleblowers lead to fraudulent reports, but for several US programs this has not been a major problem. We model the interaction between rewards for whistleblowers, sanctions against fraudulent reporting, judicial errors, and standards of proof in the court case on a whistleblower's allegations and the possible follow-up for fraudulent allegations. Balancing whistleblower rewards, sanctions against fraudulent reports, and courts' standards of proof is essential for these policies to succeed. When the risk of retaliation is severe, larger rewards are needed and so are tougher sanctions against fraudulent reports. The precision of the legal system must be sufficiently high, hence these programs are not viable in weak institution environments, where protection is imperfect and court precision low, or where sanctions against false reporting are mild.

Buccirossi, P., Immordino, G., Spagnolo, G. (2021). Whistleblower rewards, false reports, and corporate fraud. EUROPEAN JOURNAL OF LAW AND ECONOMICS, 51(3), 411-431 [10.1007/s10657-021-09699-1].

Whistleblower rewards, false reports, and corporate fraud

Spagnolo, G
2021-06-01

Abstract

It is often claimed that rewards for whistleblowers lead to fraudulent reports, but for several US programs this has not been a major problem. We model the interaction between rewards for whistleblowers, sanctions against fraudulent reporting, judicial errors, and standards of proof in the court case on a whistleblower's allegations and the possible follow-up for fraudulent allegations. Balancing whistleblower rewards, sanctions against fraudulent reports, and courts' standards of proof is essential for these policies to succeed. When the risk of retaliation is severe, larger rewards are needed and so are tougher sanctions against fraudulent reports. The precision of the legal system must be sufficiently high, hence these programs are not viable in weak institution environments, where protection is imperfect and court precision low, or where sanctions against false reporting are mild.
giu-2021
Pubblicato
Rilevanza internazionale
Articolo
Nessuno
Settore SECS-P/01 - ECONOMIA POLITICA
English
Whistleblowers rewards
False allegations
Judicial errors
Standard of proof
Corporate fraud
https://www.scopus.com/record/display.uri?eid=2-s2.0-85116245242&doi=10.2139/ssrn.2993776&origin=inward&txGid=f7562babd2cc663eab2aac6b6e5525dc
https://doi.org/10.1007/s10657-021-09699-1
Buccirossi, P., Immordino, G., Spagnolo, G. (2021). Whistleblower rewards, false reports, and corporate fraud. EUROPEAN JOURNAL OF LAW AND ECONOMICS, 51(3), 411-431 [10.1007/s10657-021-09699-1].
Buccirossi, P; Immordino, G; Spagnolo, G
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2108/321220
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