The bipartisan SEC Whistleblower Reform Act of 2023 comes from senators Chuck Grassley (R-Iowa) and Elizabeth Warren (D-Mass.). Senators Susan Collins (R-Maine), Raphael Warnock (D-Ga.) and Catherine Cortez Masto (D-Nev) are co-sponsors

The bill seeks to reintroduced legislation to strengthen whistleblower protections within the SEC’s Whistleblower Program, such as making the ruling apply to those who report concerns to internal managers or compliance officers too, not just to those who report directly to the SEC. It will also include processing whistleblower awards in a timely manner. Some claims had a backlog of several years. 

“Whistleblowers bring sunshine to the corners of our government and the private sector where waste, fraud and abuse are taking place in the shadows. The American people have whistleblowers to thank for recovering billions of valuable taxpayer dollars.”

Senator Chuck Grassley

“Whistleblowers play a crucial role in Congressional efforts to prevent waste, fraud, and abuse and to help ensure the effectiveness of government programs. They provide crucial information that Congress needs to conduct proper oversight of the federal government,” said Senator Susan Collins. “By improving protections for whistleblowers at the SEC, our legislation would support a culture of transparency and ultimately strengthen the agency’s mission to protect investors and markets.”

“Whistleblowers who expose wrongdoing and fraud should not be held back out of fear of retribution”, added Senator Catherine Cortez Masto.

Protection from retaliation

In particular, the SEC Whistleblower Reform Act of 2023 bill seeks to:

• protect whistleblowers from retaliation if they report violations to a direct superior. Today, whistleblowers are only protected if they report directly to the SEC or to a certain select official;
• make sure that claims and awards are processed within a year;
• clarify that whistleblowers cannot waive their rights through a predispute arbitration agreement.

“By improving protections for whistleblowers at the SEC, our legislation would support a culture of transparency and ultimately strengthen the agency’s mission to protect investors and markets.”

Senator Susan Collins

12,000 tips in 2022

Senator Grassley helped create the SEC’s Whistleblower Program in 2010. It has since achieved 160+ actions, and awarded whistleblowers more than $1.6bn.

In the fiscal year 2022, the SEC received a record number of over 12,000 tips, and has collected more than $6.3bn in fines since the program was established.

“Whistleblowers bring sunshine to the corners of our government and the private sector where waste, fraud and abuse are taking place in the shadows. The American people have whistleblowers to thank for recovering billions of valuable taxpayer dollars. I’m proud to once again lead this push for greater government accountability by protecting the whistleblower process at the SEC,” said Grassley.

This year, the SEC has made awards to six whistleblowers, totalling approximately $50m, whose help and assistance led to three successful actions. In 2022, the SEC awarded over $214.25m to whistleblowers, and information received led to 24 successful actions and one related action.