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Whistleblower Power: U.S. SEC With Record-Breaking Number Of Tips In 2023!

SEC Whistleblower Program
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Whistleblowers have become an integral part of modern cybersociety, and nowhere is this more evident than in the recent figures released by the U.S. Securities and Exchange Commission (SEC). The regulator’s Chair, Gary Gensler, announced that the SEC Whistleblower Program had received a record-breaking 18,000 tips during the 2023 Fiscal Year. He emphasized, “The public’s tips, complaints, and referrals (TCRs) are fundamental to our role as regulators.”

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

SEC Chair Gary Gensler during remarks at the 2023 Securities Enforcement Forum

The consistent growth in whistleblower tips, with new records set in nine of the past ten fiscal years, accentuates the pivotal role of the SEC Whistleblower Program. The leap from 12,300 tips in Fiscal Year 2022 to 18,000 in 2023 marks the most substantial year-on-year increase since the program’s inception.However, with this growth comes challenges.

David Colapinto, a renowned whistleblower attorney at Kohn, Kohn & Colapinto (KKC), pointed out on X (formerly known as Twitter), “With the surge in reported fraud, ensuring each tip is adequately investigated is paramount to ensure that wrongdoers are held accountable.

The value of whistleblowers in ensuring corporate accountability is undeniable. Stephen M. Kohn, KKC‘s founding partner, stated that whistleblowers would be the linchpins of accountability. He further highlighted the urgency of passing the SEC Whistleblower Reform Act of 2023. The bill aims to extend protection to whistleblowers and ensures timely compensation for their invaluable contributions.

Former SEC Commissioner and current KKC Counsel, Allison Herren Lee, echoed these sentiments. In her call for the bill’s passage, she noted, “The SEC Whistleblower Program stands as a testament to the power of whistleblowing in unearthing grave financial malfeasance. It’s a beacon for investor protection, and continued investment in this program is a must.

Established in 2010 through the Dodd-Frank Act, the SEC Whistleblower Program has since then become a cornerstone of the SEC’s enforcement strategy. With sanctions exceeding $6.3 billion recovered from fraudsters and over $1.5 billion awarded to whistleblowers, the program’s success is undeniable.

As the whistleblower numbers continue to surge, it underscores the need for vigilant oversight by both Congress and the SEC to ensure the program’s effectiveness. The recent records serve as a testament to the importance of whistleblowers in our cybersociety, acting as the vigilant watchdogs in the complex world of securities and finance.

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