By Jeb White of Taxpayers Against Fraud Education Fund
Of the major federal whistleblower programs, the SEC Whistleblower Program is the newest, dating back to only 2011. However, in this relatively short period of time, the program has grown quickly. In fact, the number of whistleblower tips has increased year-over-year, including an increase of over 32% in 2020.
In addition to garnering an increasing number of whistleblower tips, the SEC Whistleblower Program is recovering substantial fines, totaling nearly $4 billion. Whistleblowers have been recognized for their role in these recoveries. In fact, to date, $562 million in whistleblower rewards have been paid, including a record whistleblower reward of $114 million, paid in October 2020. Of particular note, 68% of successful SEC Whistleblowers have been insiders, of which 84% first raised concerns internally.
With nearly 7,000 SEC Whistleblower Submissions in FY2020, the reward structure seems to be working in encouraging people to expose fraud on the markets. If these trends continue, the SEC Whistleblower Program will surpass even the federal False Claims Act as the government's most successful fraud-fighting weapon.