Bounty Regimes

Whistleblower bounty schemes that pay individuals a cash “bounty” for surfacing information about illegal conduct have rapidly become a central policy tool in efforts to combat corporate crime and financial misdealing. This chapter offers a theoretical and empirical overview of these “bounty regimes” in three steps. First, it catalogues existing bounty regimes by comparing the structure and workings of two of its most prominent exemplars: the False Claims Act and the more recent Dodd-Frank whistleblower scheme. Next, it surveys the existing scholarly literature, with particular attention to a trio of recurrent design problems. Among these are how to incentivize an optimal level of reporting, how to harmonize bounty regimes with internal corporate compliance systems, and how to weigh efficiency and democratic-control concerns when deputizing whistleblowers to do regulatory work. The final part turns to an aspect of the regulatory design puzzle that has yet to attract substantial attention: how the organizational structure of wrongdoing (e.g., organizational complexity, the degree to which the misconduct is centralized or compartmentalized, and the like) presents opportunities and challenges in the design of bounty regimes. It is here that scholars are most likely to find fruitful avenues for further research