On October 25, Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), revealed that in the 2023 Fiscal Year the SEC Whistleblower Program the SEC Whistleblower Program received 18,000 whistleblower tips, a new fiscal year record.

“The public’s tips, complaints, and referrals (TCRs) are essential to our work as a cop on the beat,” Gensler stated during remarks at the 2023 Securities Enforcement Forum. “We received more than 40,000 TCRs in the previous fiscal year, including more than 18,000 from those critical whistleblowers.”

In nine out of the last ten fiscal years, the SEC has set a new record for whistleblower tips received. The jump from the record set in Fiscal Year 2022 (12,300) to the new 18,000 figure is the single largest increase in tips in the history of the SEC Whistleblower Program.

The immense number of tips coming into the agency underscores how important it is that the SEC Whistleblower Program is running as efficiently and effectively as possible.

“While growth of the SEC Whistleblower Program is reflected by another record breaking year for tips submitted, we should focus on the challenges of managing 18,000 tips. Lots of fraud that gets reported is not investigated and fraudsters still escape accountability,” said leading whistleblower attorney David Colapinto of Kohn, Kohn & Colapinto (KKC) on X (formerly known as Twitter).

In addition to ensuring that the SEC is able to properly review the influx of whistleblower tips it is receiving, it is critical that the SEC Whistleblower Program continues to award and protect the whistleblowers who are coming forward with information about securities fraud.

“Whistleblowers are accountability’s cornerstone,” says KKC founding partner Stephen M. Kohn. “Chair Gensler’s comments further support the need for Congress to pass the bipartisan SEC Whistleblower Reform Act of 2023. Without the Reform Act whistleblowers will continue to wait for years in order to obtain any compensation, and those facing retaliation often will have no remedy.”

Introduced by Senators Chuck Grassley (R-IA) and Elizabeth Warren (D-MA) on March 15, the SEC Whistleblower Reform Act of 2023 extends whistleblower protections to corporate whistleblowers who report potential securities violations internally but not externally to the SEC. Furthermore, the bill codifies an SEC rule banning restrictive non-disclosure agreements and aims to ensure the prompt payment of whistleblower awards by setting mandatory deadlines for the SEC to issue award determinations.

In June, former SEC Commissioner Allison Herren Lee, currently Of Counsel at KKC, wrote a piece calling for the passage of the bill. “If passed, this legislation will help ensure that the SEC Whistleblower Program remains an indispensable tool in the Commission’s efforts to police wrongdoing and protect investors,” Lee wrote.

“The SEC Whistleblower Reform Act reflects a bipartisan consensus that a strong whistleblower program benefits investors, companies and the public,” Lee further wrote. “The program has helped uncover — and remediate –serious and costly frauds that might never have otherwise come to light. Having worked in law enforcement for over a decade, and then as an SEC Commissioner helping to oversee the SEC’s Office of the Whistleblower, I know firsthand the value of continued investment in this highly successful program. I hope Congress will act quickly to pass this important legislation.”

Established in 2010 with the passage of the Dodd-Frank Act, the SEC Whistleblower Program has blossomed into an indispensable part of the SEC’s enforcement efforts. The program has recovered over $6.3 billion in sanctions from fraudsters and awarded over $1.5 billion to whistleblowers.

As the number of whistleblowers flocking to the program continues to skyrocket, it is essential that both Congress and the SEC work to ensure that the program functions to its highest capabilities.