Whistleblowing

Agency eyes big revamp of Wall Street whistleblower program

A federal agency is moving with little fanfare to revamp one of the most successful whistleblower programs in the government, alarming advocates who warn the changes will set back efforts to police Wall Street and punish corporate fraud.

Much like the whistleblower system for intelligence agencies that triggered the impeachment inquiry of President Donald Trump, the program grants anonymity to people who come forward with allegations of wrongdoing. But unlike that system, it deals with the private sector, offering cash payouts to people who provide information that helps the Securities and Exchange Commission identify fraud and wrongdoing.

The program was created in 2010 by the Democrats’ Wall Street oversight law. Tips, and substantial cash payouts, have flowed since it started in 2011.

The SEC has collected some 26,000 tips and complaints, resulting in more than $2 billion in penalties and restitution.

More than $300 million has been distributed in roughly 50 awards to people who provided actionable information. And taxpayers don’t foot the bill because the award money comes directly from funds the SEC collects in settlements.