The number of whistleblowers receiving awards from the Securities and Exchange Commission dropped sharply in fiscal year 2023, even as more tips poured in than ever before, and a single informant received the largest payout in agency history.
The agency received more than 18,000 tips in the fiscal year that ended Sept. 30, a 50% jump from the previous year, according to the SEC whistleblower program’s annual report to Congress. But only 68 tipsters got any money, compared with more than 100 in each of the previous two years.
Interviews with attorneys who participate in the program and a review of SEC decisions — along with court cases challenging some of those decisions — portray a program straining under the weight of its success. The lure of huge payouts, such as the $279 million that went to one tipster last year, with no growth in the program’s staffing or budget, may be taxing the SEC’s ability to keep up with the intent of the legislation authorizing it, attorneys say.
“They need more resources. The SEC is very good at evaluating whistleblower disclosures and prioritizing action, but surely when you have 18,000 tips, there’s a real risk that serious harm to investors will be missed,” Washington attorney Jason Zuckerman of Zuckerman Law said.
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