Wall Street is Getting the Message – The SEC Relies on and Rewards Whistleblowers


May 13, 2024

The Securities and Exchange Commission’s Whistleblower Program was established to incentivize financial industry professionals to play an important role in policing our nation’s capital markets, protecting investors, remedying past fraudulent conduct, and deterring it in the future. Over its decade-plus history, the program has been a resounding success. By offering awards of up to 30% of the money the SEC recovers in an enforcement action, the SEC Whistleblower Program has sent the loud and clear message that it pays to do the right thing. Multiple awards of over $100 million dollars in the last year amplify this message and SEC statistics indicate that would-be whistleblowers in the financial industry are paying attention. 

So, who are these would-be whistleblowers? In the financial industry, there are countless professionals who research and analyze every type of stock, bond, and increasingly more exotic investment products. These individuals sometimes learn through their work that a company is making false statements to the market to inflate the value of its securities, or manipulating security prices, or committing other violations of the federal securities laws. 

Not All Whistleblowers Are Company Insiders

According to the SEC, about 60% of the tips it receives come from company insiders who witness fraud and have access to incriminating non-public information that can be valuable to SEC enforcement teams. Yet nearly half of all SEC whistleblower tips originate from individuals who work outside of the company against which they reported fraud and who use their expertise and analysis to discover evidence of fraudulent schemes. 

So, in addition to using well-researched information to make smart and ethical decisions for their firms and clients, investment professionals can also monetize their analysis by providing it to the SEC and helping it investigate and prosecute securities fraud. 

Skyrocketing Whistleblower Awards

In fiscal year 2023, the SEC paid almost $600 million to whistleblowers, the largest annual amount in the history of the program. That total includes the SEC’s largest-ever whistleblower payment of $279 million, stemming from a tip it received about a bribery-for-business scheme allegedly spearheaded by Swedish telecommunications giant Ericsson, as well as another whistleblower award of over $100 million that went to seven tipsters. Since the SEC Whistleblower Program was established, it has paid more than $1.9 billion in awards to hundreds of whistleblowers who have provided invaluable assistance to the SEC’s enforcement efforts. 

SEC recoveries are frequently in the tens of millions of dollars – meaning whistleblower awards are often substantial since they are set by law at amounts between 10% and 30% of the SEC’s recovery. Factors that will increase the amount of an award within that range include:

  • The information significantly furthers an SEC investigation.
  • The whistleblower and his or her lawyer provide ongoing assistance during an investigation.
  • An enforcement action involves a law enforcement priority such as recovering investor funds.

Whistleblower Anonymity

The SEC recognizes that financial awards are not always sufficient to encourage people to come forward, particularly if they are concerned about being branded as a “whistleblower” in their industry. Accordingly, the SEC Whistleblower Program protects the anonymity of whistleblowers in multiple ways:

  • The SEC will take care to keep a whistleblower’s information strictly confidential and will often ask the whistleblower for consent before sharing it even with other government agencies.
  • The SEC does not reveal the identity of a whistleblower when granting an award and goes so far as to not disclose even the enforcement action to which an award applies.
  • Whistleblowers who retain an attorney to help prepare a submission and interact with the SEC can proceed anonymously through the whistleblower process – meaning that even the SEC does not know the individual’s identity. 

The SEC has ramped up its protection of whistleblowers and actively enforced its rule against interfering with anyone reporting fraud to the Commission. It has brought enforcement actions against companies for imposing restrictive confidentiality agreements and other actions meant to impede SEC whistleblowing.


The SEC Whistleblower Program has been one of the most impactful developments in financial fraud enforcement in recent decades. Last year alone, the SEC received over 18,000 new tips covering a wide range of securities violations, with increasing numbers of market manipulation and crypto asset submissions, and with a significant number coming from whistleblowers who reside in foreign countries. The program’s ongoing success is critical to the proper functioning of our capital markets and relies on individuals who learn of securities fraud and report their information to the SEC.