I remember being a kid and watching Star Wars, rejoicing at the end when the small band of rebels blew up the Death Star. Though Wall Street is by no means The Rebel Alliance, it is often the only organization standing in the way of Big Government economics. Though I myself often join the beheading pleas for Wall Street executives, I have to admit that they are often times the only protection we have against a centralized economy like many of the world’s top financial players.

Well…Star Wars came and went. A few years passed, I got a little older and just when I least expect it…The Empire Strikes Back.

What a Virus is…

Simply put a virus is an infective agent which sneaks into a system undetected, multiplies and infects the system with intent to harm or destroy. This may be an obtuse way of addressing the new S.E.C. ruling giving whistleblowers greater financial incentive, but it makes a lot of sense if you think about it. The same way the U.S. government learned with Organized Crime, it is learning with Wall Street. Though some of you may scoff at the comparison between bankers and gangsters, the money motivated persona is undoubtedly a necessity in both professions. When the Feds realized they could motivate criminals with perks (not to mention the avoidance of jail time) such as new lives and taxpayer funded lifestyles…all of a sudden, Omerta became a lot less silent.

The new S.E.C. whistleblower rules which essentially give the already manic Sarbanes Oxley legislation a fully loaded meth pipe, are the first regulatory gesture which actually will hurt Wall Street. Naturally, in the only place Wall Street can be hurt… in the pocket. If you don’t have the time to read the whole article or check out the actual legal document, muse over the following exerpt:

The S.E.C. also lowered the standard for deciding whether information can qualify for an award, requiring that it “significantly contributed” to the investigation rather than the proposed requirement that it “would not have otherwise been obtained and was essential to the success of the action.” Thus, disclosure of an investigation could draw out additional information from employees about misconduct in the hope of receiving an award, making life even more complicated for corporate lawyers as they try to deal with an S.E.C. or Justice Department investigation.

In effect this tell us, that the S.E.C. is going to be far more willing to award you if you snitch on your Capos and Dons…pardon, VPs and MDs. In an industry where just about everyone is there because of the amount of money they can make, this is a pretty good strategy… don’t you think? With so many young analysts becoming disillusioned upon finding out that it’s not all models, bottles, mansions and boats…doesn’t this new policy greatly increase the likelihood that many of them will report wrongdoings they see?

What should be far more alarming to Wall Street brass is that the lower hurdle rate for rat comp may induce potential Sammy Gravanos and Henry Hills to look for transgressions where they aren’t any…

I’m curious how you guys would react if and when you saw a co-worker or superior do something shady. Does this sort of regulation make a difference in your mind? Guys like Bradley Birkenfeld gave a great example of why blowing the whistle on an investment bank is not a safe play. Things do seem to be changing, however, so what about now? After Wall Street seemingly weathered the regulatory storm…here comes a rule which could really change the way we do business.

How much of a reward would you need in order to step forward against your employer? Morals are always a factor in this sort of decision, naturally. I just think that with less to fear about stepping forward, more guys are going to begin looking at the Wall Street version of WitPro.

So I ask you monkeys, at which point do the Wall Street rank and file motivated by greed and the potential of a quick cash out go from soldiers to confidential informants?