Dodd-Frank's whistleblower provisions have received a good amount of discussion here and elsewhere already, with much more to come as the details get ironed out. In short, in SEC enforcement cases that involve penalties worth more than $1 million, whistleblowers/informants may be entitled to collect 10% to 30% of the penalties collected by the agency.

The prevailing wisdom has been that a crush of tips and referrals will result from these financial incentives, and that this is a good thing. This may well be the case. Today, however, I've started to see some dissenting opinions popping up.

In an article today on, Luigi Zingales, a University of Chicago professor who has studied the issue of whistleblowers, offers a reminder that there are serious costs involved in being a whistleblower. "Basically, [whistle-blowing] ruins your life," Zingales says. "What is worth your life getting ruined? It's pretty expensive."

Contemplating a flood of new claims driven by aggressive law firms that represent whistleblowers, Walter Olson of the Cato Institute asked whether this was the result Americans really wanted: "I'm skeptical, he said. "This is the trend toward the informant-method of law enforcement. Congress sees this as free money, but do we want to live in a society with paid informants everywhere?"