On March 15, a bipartisan group of senators introduced the SEC Whistleblower Reform Act of 2023. The bill strengthens the U.S. Securities and Exchange Commission’s (SEC) highly successful whistleblower award program by addressing issues in the Dodd-Frank Act.
“This is an important bill that needs to be quickly passed,” said leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto.
“The bill fixes the three big problems with Dodd-Frank: It covers internal whistleblowers who report to corporate compliance, it addresses the long delays that have bogged down the program, and it makes sure that nondisclosure agreements do not silence whistleblowers,” continued Kohn, who also serves as the Chairman of the Board of the National Whistleblower Center.
The SEC Whistleblower Reform Act is sponsored by Senators Chuck Grassley (R-IA), Elizabeth Warren (D-MA), Susan Collins (R-ME), Raphael Warnock (D-GA) and Catherine Cortez Masto (D-NV).
The SEC Whistleblower Program offers monetary awards and anti-retaliation protections to whistleblowers disclosing violations of U.S. securities law. Qualified whistleblowers, individuals who voluntarily report original information that leads to a successful enforcement action, are entitled to an award of 10-30% of the sanctions collected by the government in the action.
Since the SEC Whistleblower Program was established in 2010, it has resulted in more than $6.3 billion in sanctions and penalties. Correspondingly, the program has awarded over $1.3 billion to more than 300 whistleblowers. In Fiscal Year 2022, the program received a record 12,300 whistleblower tips.
Geoff Schweller also contributed to this article.