The Utility of Private Law Enforcement: Academic Support from the University of Chicago
Posted by Zachary Kitts at 4/21/2008 11:22 AM and is filed under Practice Example: The Utility of Qui Tam and Private Law Enforcement in Virginia,Potential Uses of the Virginia Fraud Against Taxpayers Act 
An article published by two professors at the University of Chicago should be of some interest to readers of this blog. See, Blowing the Whistle: Which External Controls Best Reveal Corporate Fraud?
The link is to a newsletter distributed by the University of Chicago and not to the paper itself. While the sub-title of the linked article says, "New research suggests that the best way to promote fraud detection is to extend the Federal False Claims Act to corporate fraud." At the risk of sounding snobby, I would like to point out that is not, strictly speaking, an accurate way to conceptualize what the study says.
The Federal False Claims Act, of course, applies to any person—whether a natural person or a corporation or both—who makes a false claim to the government for money. What the subheading means to say, I think, is that the unique qui tam structure of the Federal False Claims Act—which allows private citizens to prosecute cases on behalf of the government and calls for a percentage of the government's recovery to be paid to the party who blew the whistle on the fraud—should be extended to the corporate governance sphere.
And thus the article strikes upon one of the themes of this blog: the utility and effectiveness of private law enforcement generally. We do not need to go so far as qui tam to see that private law enforcement is effective.
At any rate, check out the study, and I welcome your comments.
ZAK
http://www.cookkitts.com
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