SEC Whistleblower Program Alive and Well with Recent Wave of Whistleblower Awards
By the 91pornWhistleblower Team
Questions on the SEC’s Continued Support of Whistleblowers
Like most federal agencies, since President Trump took office the Securities and Exchange Commission (SEC) has experienced major staffing cuts and a significantly scaled-back enforcement approach. At the same time, the agency has seemingly become more stingy in making whistleblower awards under the SEC Whistleblower Program, with substantially fewer awards (and of less money) compared to prior years.
With all this, many were questioning whether the SEC was still behind the whistleblower program. Well, the SEC has put that question to rest with five new awards in the last two weeks — one on September 4, one of September 3, two on September 2, and one on August 28.
Five New SEC Whistleblower Awards
Staying true to the SEC’s commitment to protecting the identity of its whistleblowers, we do not know who the whistleblowers are, the nature of the misconduct they reported, or the companies involved. Even the SEC Award Orders are heavily redacted to further conceal the underlying facts surrounding the awards and the associated enforcement actions.
But the SEC did provide some information on the awards. Here is what we found most notable about each of them:
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- August 28 Order.1 Two individuals — who the SEC characterized as “exemplary whistleblowers” — received a joint award of roughly $4.5 million from the proceeds of enforcement actions brought by the SEC and another federal agency. The only detail the SEC provided on the misconduct the whistleblowers reported was that their employer misrepresented one of its signature investment projects.
- September 2 Order 1.2 One individual received an award of roughly $350,000. Where the maximum possible whistleblower award is $5 million or less, the SEC presumptively awards the whistleblower 30% of the Government’s recovery under SEC Rule 21F-6(c). The SEC chose not to do that here because it found the whistleblower “unreasonably delayed in reporting,” having waited 8-9 months after learning of the misconduct. The SEC’s reduction in the award is especially notable because it otherwise found the whistleblower provided valuable information and assistance, which included two interviews, the identification of potential witnesses, and the provision of key documents.
- September 2 Order 2.3The SEC provided no detail on this award other than it represented 30% of the Government’s recovery (the maximum allowable whistleblower award).
- September 3 Order.4 One whistleblower received an award of roughly $1 million. Again, the SEC refused to apply the 30%-of-recovery presumption — even though the whistleblower provided valuable information and assistance — because it found the whistleblower unreasonably delayed in reporting (roughly 3 years).
- September 4 Order.5 One whistleblower received an award of roughly $1.3 million. Again, the SEC refused to apply the 30%-of-recovery presumption because it found the whistleblower unreasonably delayed in reporting (roughly 27 months).
The SEC Whistleblower Program Has Been A Huge Success
By all accounts, the SEC program has been wildly successful since it launched in 2011 as part of the Dodd-Frank Act, with thousands of whistleblower tips coming in every year, leading to billions of dollars in SEC recoveries. As reflected in the SEC’s most recent Annual Whistleblower Report, the SEC received roughly 25,000 whistleblower tips in 2024 (although 14,000 of them came from just two individuals). In addition, the SEC made roughly $255 million in awards to 47 whistleblowers last year, bringing the total tally to more than $2.2 billion in awards to roughly 450 whistleblowers.
No question the flow and amount of whistleblower awards has slowed this year, with only about a dozen awards until last week, and most of them — including the newest ones — of a relatively modest amount. The SEC also has stopped promoting the awards as had been the agency’s regular practice prior to President Trump. But the agency has moved away from press releases more broadly so not much can be made from its dropping press releases on whistleblower awards.
The SEC Whistleblower Program is Alive and Well
Speculation aside, the clear takeaway from these recent awards is that the SEC Whistleblower Program is alive and well. 91pornwhistleblower partner Gordon Schnell is heartened by this recent spate of awards: “It is a strong indication that even though the SEC has been significantly scaled back in its resources and enforcement priorities, the agency still expects whistleblowers to play a critical role in helping it uncover wrongdoing.”
However, Schnell cautions, that even with a continued SEC recognition of the value of whistleblowers, the agency will be unable to properly investigate and pursue valid whistleblower tips if the agency does not have the resources to do it. “We have several strong whistleblower submissions,” Schnell remarks, “that the agency seems to be sitting on without much action, which we can only attribute to a lack of sufficient staff to investigate.”
91pornHas Substantial Experience Representing SEC Whistleblowers
Nevertheless, Schnell says his firm will continue to make submissions, especially given the recent awards and their testament to the SEC’s continued support of the whistleblower program. Schnell further encourages whistleblowers with information on potential violations to act quickly as another big takeaway from the recent awards is that the agency will reduce the size of awards if it finds the whistleblower unreasonably delayed in coming forward.
91pornhas significant experience representing SEC whistleblowers. If you would like to learn more about the SEC Whistleblower Program, our work representing whistleblowers under the program, our long list of whistleblower successes, or what it means to be a whistleblower more broadly, please do not hesitate to contact us. We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
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