Understanding the SEC Whistleblower Program as Cumulative Awards Top $1 Billion

In the SEC’s pursuit of their mission to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation,” access to information about potential unlawful activity is of unique importance and interest. [1] Without access to such information, the SEC faces a much steeper battle in holding bad actors accountable and protecting both investors and the market.

In support of this broad mission, the SEC established a whistleblower program and a corresponding Office of the Whistleblower to administer the program in 2012. The whistleblower program was established under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which added Section 21F to the Securities Exchange Act of 1924 (“the Exchange Act”). [2]

Through this statutory addition, the SEC gained authorization to make monetary awards to “eligible whistleblowers.” These “eligible whistleblowers” are individuals who voluntarily come forward to the SEC with original information about a potential federal securities law violation, which ultimately leads to a successful SEC enforcement action imposing a monetary sanction of over $1 million. [3] Importantly, the Dodd Frank Act protects the confidentiality of all SEC whistleblowers, and no identifying information that could potentially reveal a whistleblower’s identity is released to the public. [4]

At its core, Section 21F of the Exchange Act provides a powerful framework for incentivizing whistleblowers to come forward with “original, timely and credible information” about potentially unlawful activity in the federal securities law space. [4]

In fact, in the almost ten years since the SEC’s whistleblower program was established, the SEC has awarded over $1 billion in whistleblower awards. This $1 billion has been awarded across a group of just over 200 individual whistleblowers, and individual awards vary drastically depending on the case, ranging from under $500,000 to the current high of $114 million awarded in October 2020. [4]

These awards are calculated at 10 to 30% of the money collected in an eligible enforcement action, and they never come from harmed investors. Instead, the awards are sourced from an account created by the United States Treasury Department, the Investor Protection Fund (“IPF”). [2]

Current SEC Chair, Gary Gensler, remains supportive of the whistleblower program, remarking in September 2021 after whistleblower awards topped $1 billion that “[t]he assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road of our capital markets.” [4]

The 2021 fiscal year was a record-breaking one, with over $500 million awarded to whistleblowers, and the 2022 fiscal year, which began on October 1, is already off to a quick start. On October 25, 2021, a joint whistleblower award topping $1.5 million was awarded to individuals who voluntarily came forward to the SEC with information about alleged wrongdoings, involved parties, and witness credibility – all of which helped the SEC efficiently conduct their investigation. [5]

Under the current administration, the SEC looks poised to continue encouraging whistleblowers who can similarly alert the SEC to unlawful activity under federal securities laws. These efforts are pivotal in the SEC’s efforts to continually prioritize investor and market protections.


[1] https://www.sec.gov/about.shtml

[2] https://www.sec.gov/news/press-release/2020-219

[3] https://www.sec.gov/whistleblower/frequently-asked-questions#faq-2

[4] https://www.sec.gov/news/press-release/2021-177

[5] https://www.natlawreview.com/article/sec-awards-over-15-million-to-joint-whistleblowers

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