A man dressed in a business suit with a whistle symbolizes a whistle blower.
A man dressed in a business suit with a whistle symbolizes a whistle blower. - 
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Kai Ryssdal: A lot of people are still trying to figure out exactly what the new financial reform law is going to mean in practice. One possibility is that there could be a huge increase in the number of cases filed against American companies. One key part of the new law lets the SEC -- the Securities and Exchange Commission -- give big payouts to whistle blowers, just one of a bunch of new powers the SEC is going to get.

But as Marketplace's Alisa Roth reports, the agency's also making more use of the tools it already has.

Alisa Roth: So, the new law will also let the SEC do more investigations, issue more subpoenas and bring more lawsuits.

David Ruder is a law professor at Northwestern and a former chair of the SEC. He says the issue is how the SEC uses the powers it's had all along.

David Ruder: The commission has always had great powers. The question is whether it'll exercise those powers.

One of the reasons the SEC hasn't brought very many lawsuits against companies is that those cases are so hard to prove, but he thinks the agency is getting bolder.

Ruder: Here, I think the commission is going to be much more willing to take a few losses in order to make it known that they will be aggressive in their enforcement policies.

What that means is the SEC will be more likely to sue companies, even when it's not sure it can win -- just to make the point that it's serious.

Jennifer Arlen is a law professor at NYU. She says in the past, the SEC has tended to go after specific acts of wrongdoing -- like somebody who's engaging in insider trading. But she thinks cases like the one the SEC filed this spring against Goldman Sachs may suggest that it has a new strategy: Cracking down on questionable practices that everybody does, by making an example of one of the big players.

Jennifer Arlen: If Goldman violated securities law when they did this, so did other firms. And I also suspect that the action against Goldman may very well encourage other firms to be more forthcoming in their future disclosures.

She says the agency also needs to be more proactive: It should hire more people who've worked in the financial industry, so they know what to look for. That could happen: The SEC says it's planning to hire 800 new people.

In New York, I'm Alisa Roth for Marketplace.