In a recent revelation, Gary Gensler, the Chair of the U.S. Securities and Exchange Commission (SEC), announced that the regulator reached an all-time high in the 2023 Fiscal Year with 18,000 whistleblower tips. This figure not only surpasses the previous fiscal year’s record by a significant margin but also emphasizes the invaluable contribution of whistleblowers in ensuring transparency and accountability.
While addressing the 2023 Securities Enforcement Forum, Gensler remarked, “The surge in public tips, complaints, and referrals (TCRs) is foundational to our role as the market’s watchdog. The staggering 40,000 TCRs received last year, including over 18,000 from pivotal whistleblowers, speaks volumes about their significance.”
It’s worth noting that the SEC has consistently witnessed a rise in whistleblower tips in nine out of the past ten fiscal years. The leap from 12,300 tips in the Fiscal Year 2022 to the current 18,000 marks the most significant year-on-year increase since the inception of the SEC Whistleblower Program.
Whistleblowers are the bedrock of accountibility
For the program to achieve its intended purpose, it’s not only essential for the SEC to efficiently review the multitude of tips but also to persistently award and safeguard the whistleblowers who shed light on securities fraud. As Stephen M. Kohn, a founding partner at KKC, puts it, “Whistleblowers are the bedrock of accountability.”
The proposed SEC Whistleblower Reform Act of 2023 seeks to bolster protections for whistleblowers, especially those who report securities violations internally. The bill also aims to expedite whistleblower awards and restricts non-disclosure agreements that could hinder reporting.
Introduced in 2010 through the Dodd-Frank Act, the SEC Whistleblower Program has evolved into a critical component of the SEC’s enforcement strategy, recuperating over $6.3 billion from fraudsters and rewarding whistleblowers with over $1.5 billion.
As the program witnesses an ever-increasing number of whistleblowers, it’s imperative for both the Congress and the SEC to ensure that it operates at its optimum, reflecting the essence of a robust cybersociety.
