“By any measure, the SEC’s whistleblower program has been a resounding success,” according to a newly released report by Better Markets. The report, The SEC’s Whistleblower Program Is Key to Protecting the Economy and Main Street Americans’ Wallets, details the successes of the SEC Whistleblower Program and outlines why it may be even more important if the SEC faces funding and staffing challenges in the years ahead.
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. Overall, the SEC Whistleblower Program has awarded more than $2.2 billion to 444 whistleblowers since it was founded in 2010 with the passage of the Dodd-Frank Act.
In its report, Better Market details the SEC Whistleblower Program’s successes in FY 2024, including a record number of whistleblower tips, over $255 million in awards, and strong enforcement of a whistleblower protection rule.
“This means that, if recent reports about potential staffing cuts at the SEC prove true, the importance of the whistleblower program in the coming years will only increase. The Wall Street Journal reports that the Department of Government Efficiency (‘DOGE’) will target cuts at agencies including the SEC. One of DOGE’s goals is to reduce the size of the federal workforce, so cuts at the SEC could mean fewer enforcement personnel,” the report states.
“This means the SEC would need more help in holding fraudsters accountable. Fortunately, the purpose of the SEC’s whistleblower program is to motivate people who know of securities violations to report them to the SEC and thereby assist the government in identifying and prosecuting individuals who have violated the securities laws. So if the SEC won’t have the resources it needs to investigate anything other than the biggest cases, it will have to rely more heavily on whistleblowers to identify misconduct,” the report continues.
Further Reading:
The SEC’s Whistleblower Program Is Key to Protecting the Economy and Main Street Americans’ Wallets
SEC Whistleblower Program Continues to Thrive, Commission’s Annual Report Shows
