Senators Aim to Bolster SEC Whistleblower Program

Since its inception as part of the Dodd-Frank legislation of 2010, the Securities and Exchange Commission (SEC) whistleblower program has collected more than $6 billion in penalties and recovered funds. Specific forms of misconduct reported to the SEC under this initiative includes accounting fraud and insider trading. Without these tips, much of this illicit activity might go undetected.

When a person provides specific, timely and credible information that triggers an SEC enforcement action resulting in sanctions of more than $1 million, that whistleblower can receive between 10 and 30 percent of the amount recovered. In addition to financial incentives, the program offers robust protections for whistleblowers. The SEC is committed to maintaining the confidentiality of whistleblowers and does not disclose their identities without their consent, except in limited circumstances. Furthermore, the program includes anti-retaliation provisions, making it unlawful for employers to retaliate against employees who report securities law violations.

Given the success of the SEC’s whistleblower program, there is now a bipartisan effort in the Senate to strengthen protections for those who report misconduct and make the review system more efficient. The SEC Whistleblower Reform Act of 2025 would make the following three changes to the current system:

  • Expand reporting options — Currently, whistleblowers must provide information to the SEC or, in some cases, officials from another government agency in order to be legally guarded against retaliation. Should the bill pass, reports to workplace superiors would also trigger whistleblower protection. 

  • Accelerate the process — Unfortunately, the SEC whistleblower system is plagued by long delays. Improvements within the proposed legislation would reduce the backlog and give whistleblowers the chance to collect payment more quickly.

  • Protect against arbitration waivers — Should the bill pass, employers would not be able to invoke pre-dispute arbitration agreements to prevent workers from bringing whistleblower actions. 

If you have information about potential securities law violations and are considering becoming a whistleblower, it’s essential to understand your rights and the applicable legal process. At Kardell Law Group we pursue compensation for clients who are aware of financial misconduct or fraud against the government. Contact us today to schedule a consultation and learn how we can assist you.