The Securities and Exchange Commission (SEC) has denied all 24 whistleblower award claims in the first quarter of fiscal year 2026. This marks only the second time since 2016 that the SEC’s whistleblower program did not grant an award in the first three months of the fiscal year.
The denial streak follows fiscal year 2025, which saw the lowest annual award total since 2017. Even during this downturn, the SEC awarded over $15.8 million in the first quarter of FY2025. In FY2017, previously considered a remarkably stringent period for whistleblower awards, the SEC still granted over $4.4 million in awards in the first three months. SEC whistleblower advocates are concerned that this trend signals an unprecedented level of governmental reluctance to provide monetary awards to whistleblowers.
The three-month period without whistleblower awards, immediately following a year in which award totals reached their lowest level since 2017, has raised questions about the program’s future effectiveness. Legal experts and whistleblower advocates say monetary incentives are critical to encouraging individuals to report wrongdoing. Reduced awards could result in fewer tips, thereby reducing the agency’s ability to detect and address misconduct and corruption, they warn.
Under the Dodd-Frank Act, whistleblowers are entitled to receive an award of between 10 and 30% of the sanctions collected by the SEC based on original information provided by the whistleblower, provided the total sanctions collected exceed $1 million. Critically, these awards are funded by the sanctions collected by the SEC through whistleblower-sparked enforcement actions, meaning that whistleblower awards are never funded by taxpayer dollars. In other words, governmental reluctance to pay whistleblower awards does not save taxpayers money.
The National Whistleblower Center, a whistleblower advocacy group, has warned that effective reward programs are critical to protecting whistleblowers, who frequently face retaliation and the loss of lucrative career opportunities after coming forward.
Whether the rest of the 2026 fiscal year will continue this denial trend remains unclear. Advocates warn that continued reluctance to grant awards could reduce the number of tips the agency receives, making domestic anti-corruption enforcement progressively more difficult.