A record high total of more than $501m was awarded to whistleblowers by the SEC in 2023 – yet only nine successful SEC enforcement or related actions resulted from the tips. This compared unfavourably with last year with $214.5m paid and 25 actions resulting.

Historically 2021 was an even busier year, with over 50 actions undertaken and more than $453m awarded to whistleblowers. In 2020, over 40 actions were undertaken, and the awards exceeded $348m.

Ericson bribery case results in record award

In 2023 the largest ever award was paid out in May – a staggering $279m was handed out to one whistleblower for their assistance in relation to a bribery case against Swedish telecommunications company Ericsson.

The SEC has never commented on the case or formally identified the company or the tipster, which is consistent with its whistleblower protection rules.

But Creola Kelly, Chief of the SEC’s Whistleblower Office, said that the whistleblower’s assistance, which included multiple interviews and written submissions, was critical to the success of the regulatory actions. “While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.”

Gurbir S Grewal, Director of the SEC’s Division of Enforcement, said that the size of the award “not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program”.

“These whistleblowers provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors.”

Creola Kelly, Chief of the SEC’s Office of the Whistleblower

Before this new $279m award, which constitutes a record amount, the highest previous whistleblower award was handed out in October 2020, when a whistleblower was awarded over $114m for information and assistance that led to successful enforcement action by the SEC as well as related actions by other agencies. 

Since the first whistleblowing award in 2012, the SEC has handed out more than $1.92 billion to whistleblowers.

“This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4bn in ill-gotten gains and interest. As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations,” Grewal said.

Whistleblower awards in 2023

The awards, which can range from 10% to 30% of the money collected when the monetary sanctions exceed $1m, understandably varied in size. The money is paid out of an investor protection fund established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators.

The SEC has reiterated again and again that no money has ever been taken or withheld from harmed investors to pay a whistleblower award.

Nine awards were paid out in 2023 to 25 whistleblowers adding up to a total of approximately $501m:

Date	Award	Enforcement action count
December 22	More than $28m combined to seven individuals	1 SEC
August 25	More than $18m to one whistleblower	1 SEC
August 4	More than $104m to seven individuals	1 SEC and other related actions by another agency
July 12	More than $9m to one whistleblower	1 SEC
May 5	Nearly $279m to one whistleblower	1 SEC and related actions
March 31	More than $12m to two whistleblowers	1 SEC
January 24	More than $28m to two whistleblowers	1 SEC
January 19	Approximately $18m to three whistleblowers	1 SEC
January 13	More than $5m to one whistleblower	1 SEC

For the last award of the year, more than $28m was awarded to seven individuals, who according to Creola Kelly, “provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors”.

CFTC whistleblower awards

The CFTC also issues whistleblower awards, though not in the same volume as the SEC.

This year, three awards totalling $33.3m were issued to four whistleblowers, a significant jump from the total of $11.125m in total awards paid out in 2022.

The biggest award to date was issued by the CFTC in 2021, when one whistleblower was awarded $200m for their information that contributed to an already open investigation and resulted in successful CFTC enforcement action and two related actions by a US federal regulator as well as a foreign regulator. This outsize pay out meant that 2021 was also the year of the largest combined awards of $204m in total.

The largest number of awards were paid out in 2020, with six awards going to 12 whistleblowers.

Since awarding the first whistleblower in 2014, the CFTC has granted whistleblowers about $365m in total awards.

As with the SEC’s payouts, these awards also range between 10 and 30 percent of the monetary sanctions collected. They are paid from the CFTC’s Customer Protection Fund, which was also established by Congress, and is financed entirely through monetary sanctions paid to the CFTC by violators of the Commodity Exchange Act.