Whistleblower
An individual who reports suspected legal violations to authorities, with SEC whistleblowers eligible for financial awards.
What is Whistleblower?
A whistleblower is an individual — typically an employee, contractor, or industry insider — who reports suspected illegal activity to government authorities or law enforcement. In the securities context, the SEC Whistleblower Program, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, provides significant protections and financial incentives for individuals who voluntarily provide original information about potential securities law violations. If the tip leads to an SEC enforcement action resulting in sanctions exceeding $1 million, the whistleblower may receive between 10% and 30% of the collected sanctions as an award. The program also prohibits employer retaliation — firing, demotion, or harassment of whistleblowers — with violators subject to reinstatement orders and double back-pay damages.
Example
In 2023, the SEC awarded approximately $279 million to a single whistleblower in connection with an enforcement action — the largest whistleblower award in SEC history at that time. Since the program's inception in 2011 through 2024, the SEC has awarded over $2 billion to more than 400 individuals, with tips leading to enforcement actions recovering over $6 billion from wrongdoers, illustrating the program's effectiveness as a market integrity tool.
Source: SEC — Whistleblower Program