A Nudged Solution to Securities Fraud

History has shown that crisis often serves as a condition precedent to social and regulatory reform. Since the 1990s, the public interest has also taken an advanced role in these reforms. As we have grown in scientific, technological, and economic sophistication, the public has increasingly adopted an aggressive public interest model, geared towards informational awareness and proliferating methods of national policy reform that shed the inefficiencies of federal bureaucracy and politics. After some time, scholars have studied, written on, and debated over the merits of this model to the point that we have begun to understand it and discuss the behavioral economics of its application. An often-studied model of reform and its companioning public interest movement is that of environmental law. The environmental model is particularly interesting because of its implications for private, self-sustaining incentives within contemporary lawmaking institutions. The environmental model has very few attached monetary incentives geared towards public advocacy as compared to other models where the similar private incentives often derive from monetary motivators. Currently, the academic and legal debate focuses on private incentives in reporting and enforcing instances of securities fraud — whistleblowing under Dodd-Frank.This article notes some common threads between financial reforms and environmental reforms, including the complex and sometimes inherently unexplainable concepts they regulate. From these comparisons, I take a predictive stance as to possible public-interest-model outcomes in light of nearly a decade of financial crisis that climatically lead to the 2008 banking crisis. Many legislative and administrative outcomes have been, and will continue to be, borne out of this crisis; however, a public interest model will inevitably become a force of power in this legal subject matter as evidenced by the comparisons to similar reforms in environmental law. Through analogy, I broadly examine several potential outcomes from the perspective of a vested public interest. Several judicial, administrative, and even congressional outcomes could arguably result from an aggressive implementation of a public interest model in the context of financial reforms. In recognition of the uninspiring governmental efforts thus far (possibly even making the situation worse), it is only a matter of time before the model appears with renewed vigor