Two whistleblowers shared a $98 million reward in August — no wonder people are spamming the SEC with tips.
Two individuals submitted more than 14,000 tips to the SEC this year, an extremely lucrative endeavor.
In the 2011 movie “Margin Call,” the venerable CEO, played by Jeremy Irons (who was disarming and charming in equal measure), says this of Wall Street:
“There are three ways to make a living in this business: be first, be smarter, or cheat.”
What he didn’t know, however, was that there’s a fourth option: become a whistleblower to the SEC. Indeed, in the very same year that the movie came out, the Securities and Exchange Commission launched its whistleblower program, and ever since, (some) whistleblowers have been making a fortune.
Snitches get riches
In the SEC’s annual report to Congress for fiscal year 2024, published on November 21, the agency reported (emphasis ours):
“…in Fiscal Year (FY) 2024, the Commission awarded over $255 million, the third highest annual amount for the Program, to 47 individual whistleblowers. These totals include an award of approximately $98 million, split between two whistleblowers…”
You read that correctly. Two whistleblowers were granted generational levels of wealth, the sort of money that typically requires phenomenal talent, luck, and hard work to earn in America… for telling on people and then supporting the SEC in their investigation. Per the report, one of them contributed more heavily, earning $82 million for their contribution, while the other took home $16 million. (In case you’re wondering: in 2024, of the whistleblowers who received awards, approximately 38% were outsiders and approximately 62% were company insiders.)
What’s most remarkable, however, is that the final part of that sentence reads, “the fifth largest award granted in the history of the Program.” Yes, the $98 million split between two individuals barely broke into the top five whistleblower payouts. The list, compiled by Zuckerman Law, reveals multiple awards over the $100 million mark, the largest of which was an eye-watering $279 million, a sum which the WSJ reported was for a bribery case against telecom company Ericsson.
The whistleblower program is designed to incentivize potential do-gooders with a serious monetary reward for helping law enforcement tackle financial crime, an undertaking which typically carries a considerable degree of career and personal risk. Per the SEC’s website, the Commission can provide awards to individuals who come forward with high-quality original information that leads to enforcement action (if more than $1 million in sanctions is ordered) — and the range for awards is between 10% and 30% of the money collected.
As the program has grown, people are increasingly aware of the life-changing impact of successful snitching. Indeed, the SEC is steadily getting more TCRs — tips, complaints, and referrals — than ever before. In fiscal year 2024, the Commission reported getting nearly 25,000 TCRs. Remarkably, the majority of those, some 14,000, were from just two people. Clearly, those two individuals are trying their hardest to get in the SEC’s good books, and with good reason. (Those same two individuals also accounted for more than one-third of the 18,000-plus tips submitted in 2023.)
That works out to about $5 million a piece on average. Putting the bad guys in jail and making a few million bucks? Not bad work… if you can get it.
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