Is SEC Whistleblower Program Topping Out?

Since its establishment more than a dozen years ago, the SEC’s whistleblower program has grown substantially — in terms of the number of whistleblower tips received by the SEC, as well as the number and dollar amount of awards paid to whistleblowers. The annual report that the SEC Office of the Whistleblower has filed with Congress covering fiscal year 2024, however, suggests the program has recently been leveling off.

For example, the report states that, apart from two particular whistleblowers, the SEC received approximately 11,000 tips, complaints, and referrals (TCRs) in both 2024 and 2023. The two whistleblowers in question, however, submitted a total of approximately 14,000 TCRs in 2024 and 7,000 TCRs in 2023. Accordingly, although the total number of TCRs was significantly higher in 2024 than in 2023, the increase seems basically attributable to these two individuals, and the usefulness of those individuals’ tips seems questionable.

According to the report, although the SEC paid a total of approximately $255 million in awards to whistleblowers in 2024, this was only the third-largest annual payout of such awards. Thus, the overall whistleblower payout level does not appear to be consistently growing from year to year.

Interestingly, the SEC barred one claimant from participation in the whistleblower program for having filed applications for awards that the SEC found to be “frivolous or lacking a colorable connection between the claimant’s tips and the [c]overed [a]ctions for which the claimant sought awards.” It is not apparent whether this banned claimant was one of the above-mentioned individuals who have been submitting extraordinarily large numbers of TCRs.

At least one aspect of the SEC’s whistleblower-related activities does continue to grow, however. Specifically, in 2024, the SEC brought 11 enforcement actions against entities and individuals for taking actions to impede whistleblowers from communicating with the SEC, including through the use of restrictive agreements of various types. The Office of the Whistleblower reports that this was more enforcement actions than in any previous year and more than twice the number brought in 2023. Moreover, one of the 2024 cases resulted in an $18 million fine, the highest ever for a case of this kind.

We have repeatedly warned our readers about these serious and continuing SEC concerns over perceived suppression of whistleblowers. See “SEC Penalizes Anti-Whistleblower Provision in Customer Settlement Agreements,” Expect Focus – Life, Annuity, and Retirement Solutions (May 2024), and “Juggling Act: SEC Fines Three Employers for Potentially Discouraging Whistleblowers,” Expect Focus – Life, Annuity, and Retirement Solutions (January 2024).