By almost any measure, Fiscal Year 2021 (ended September 30, 2021) was a watershed year in the history of the SEC’s Whistleblower program. According to the recently published annual report of the SEC’s Whistleblower Office, during FY 2021 the agency made the highest annual number of awards in the history of the program, both in terms of dollars and individuals awarded. Indeed, during FY 2021 the agency made more whistleblower awards than in all of the program’s prior years combined. The SEC’s Office of the Whistleblower’s November 15, 2021 Report to Congress can be found here.


According to the Report, in FY 2021 the agency awarded $564 million in whistleblower awards to 108 individuals, “both the largest dollar among and the largest number of individuals awarded in a single year.” By way of comparison, from the inception of the whistleblower program in FY 2011 through FY 2020, the Commission made approximately $562 in whistleblower awards to 106 whistleblowers. In other words, the Commission made more whistleblower awards than in all prior years combined.


The awards during FY 2021 included the three largest awards in the history of the program. In October 2021, the agency made a $114 million award to a single whistleblower, the largest award to a single whistleblower. In September 2021, the agency made a second $114 million award to two individuals. In April 2021, the agency issued an award of over $50 million to joint whistleblowers. These three awards alone totaled more than a quarter of a billion dollars.


While the size of the awards is astonishing, the fact is that the whistleblower program is producing results. The Report notes that information from meritorious whistleblowers has resulted in enforcement actions that led to nearly $5 billion in monetary sanctions, including more than $3.1 billion in disgorgement of ill-gotten gains and interest, of which more than $1.3 billion has been, or is scheduled to be, returned to harmed investors.


The one thing that is clear is that the awards have captured the imagination of prospective whistleblowers. In FY 2021, whistleblowers came forward in record numbers. The agency received 12,210 whistleblower reports in FY 2021, representing a 76% increase over FY 2020, when the agency received 6,911 reports. The number of whistleblower tips has increased every year since the program incepted in FY 2021. Over the life of the program, the agency has received over 52,400 whistleblower tips.


In terms of the type of wrongdoing identified in the whistleblower reports during FY 2021, the most common type of allegation was manipulation (25% of all reports), followed by corporate disclosures and financials (16%), and offering fraud (16%). Interestingly, 6.2% of the FY 2021 reports involved initial coin offerings and cryptocurrencies.


The 2021 whistleblowers reports were made by whistleblowers in all 50 U.S. states (as well as the District of Columbia, the Virgin Islands, and Puerto Rico). The state with the highest number of whistleblowers was California (1,006), followed by Maryland (486), and Florida (468).


About 1350 of the FY 2021 whistleblower reports were received from whistleblowers located outside the U.S. During the year the agency received reports from whistleblowers in 99 foreign countries. The country with the highest number of whistleblowers during the year was Canada (248), followed by China (152), Colombia (85), and India (81).


Overall, the report notes that whistleblowers have made “a tremendous contribution to the agency’s ability to detect securities law violations.” The Report quotes the current acting head of the Whistleblower Office as saying that “The success of the Commission’s whistleblower program in landmark FY 2021 demonstrates that it is a vital component of the Commission’s enforcement efforts.”


The acting head also acknowledged that one of the justifications for the agency’s large is awards is that they will encourage other whistleblowers to come forward. The Report quotes the acting head as saying that “We hope the awards made this year continue to encourage whistleblowers to report specific, timely, and credible information to the Commission, which will enhance the agency’s ability to detect wrongdoing and protect investors and the marketplace.”



The numbers for FY 2021 really are amazing. But one thing that is implicit in all these numbers is that, while it is possible for a whistleblower to receive a huge bounty, the chances of any whistleblower actually getting an award are very small. Those of you who were reading the numbers closely noted that while the agency has received more than 52,400 whistleblower reports during the life of the program, the agency has only made a total of 214 awards. While more than half of those awards were made in FY 2021 (meaning that the whistleblower’s prospects are improving), the fact is that over the life of the program, only 0.4% of all whistleblowers actually received an award of any kind. Making a whistleblower report in the hope of receiving a whistleblower bounty is actually a longshot proposition, at best. It will however be interesting to watch to see if the increase number of whistleblower awards continues to increase.


Long time readers know I have followed the whistleblower program closely over the years. Part of the reason for the attention is that I find the action of whistleblowers interesting. It is hard to know from the outside, but I suspect there are a lot of interesting stories in the whistleblower reports the SEC receives.


Another reason I have been following the whistleblower program closely is that I thought when the program was put in place that it would lead to a surge in private securities class action lawsuits based on allegations that the whistleblowers brought to light. The fact is that there never was a surge. Indeed, for most of the program’s existence, there were, as far as I was aware, no private securities suits based on allegations brought to light by an SEC whistleblower.


That changed this past year. As discussed here, in January 2021, a plaintiff shareholder filed a securities class action against ExxonMobil based on SEC launched an investigation of the company based on whistleblower reports questioning the company’s asset valuations of its Permian basin oil fields. More recently, a plaintiff shareholder filed a securities suit against Meta Platforms (Facebook’s parent) based on a whistleblower’s disclosures about safety and social features of the company’s Instagram platform. The Facebook whistleblower made her allegations quite publicly, but she also made them in an SEC whistleblower report as well.


These two lawsuits in calendar year 2021 relating to SEC whistleblower reports are not enough to constitute a trend; it is hard to say whether there might be other cases filed in the future based on whistleblower reports. But the cases do show how whistleblower allegations can lead to securities class action lawsuits.