On April 21, two joint whistleblowers were awarded $6 million from the U.S. Securities and Exchange Commission (SEC). The whistleblowers provided a tip which caused the Division of Examinations to open an examination which eventually resulted in a successful enforcement action.
Under the SEC Whistleblower Program, individuals from across the globe may anonymously report securities law violations. Qualified whistleblowers are eligible to receive monetary awards of 10-30% of the monies collected by the government in action aided by their disclosure.
According to the SEC, the whistleblowers “provided new information that led to the opening of an examination and provided a roadmap for an enforcement action that resulted in the covered action.”
“Today’s award illustrates that the agency can leverage whistleblower information in various ways, including by prompting an examination,” said Jonathan Carr, Acting Chief of the SEC’s Office of the Whistleblower. “If that examination ultimately results in an enforcement action, the whistleblower may be eligible for an award.”
The SEC Whistleblower Program was established in 2010 with the passage of the Dodd-Frank Act. Overall, the SEC has awarded more than $2.2 billion to more than 400 individual whistleblowers.
The 2024 Fiscal Year was a major year for the SEC Whistleblower Program, including a record number of whistleblower tips, over $255 million in awards, and strong enforcement of a whistleblower protection rule.
Despite the program’s success, advocates still see the need for reforms to the program. In March, Senators Chuck Grassley (R-IA) and Elizabeth Warren (D-MA) reintroduced the bipartisan SEC Whistleblower Reform Act.
The National Whistleblower Center is calling for the passage of the SEC Whistleblower Reform Act and has created an Action Alert allowing individuals to write to members of Congress calling for the bill’s passage.