Regulators Look to Expand Whistleblower Reward Programs

You know how to whistle, don’t you? All it takes is a good incentive program.

The Wall Street Journal reported on Thursday that the past few years have seen an uptick in government agencies, in the US and beyond, either setting up whistleblower reward programs or warming to the idea. With news of another Boeing whistleblower coming forward, such programs may become more essential.

Snitches Get Riches

In 2010, two years after the financial crisis forever burnished bankers’ glowing reputation, the Dodd-Frank Wall Street Reform and Consumer Protection Act was established. Among other things, it set up two whistleblower reward programs: one at the Securities and Exchange Commission, and another at Commodity Futures Trading Commission. Both programs promise whistleblowers whose tips result in successful enforcement (i.e. big chunky fines) can get between 10% and 30% of the monetary penalty.

Whistleblower reports to the SEC experienced an upward surge after the pandemic, and although there was a fairly stable level of tips between 2021 and 2022, last year saw another big leap:

• In its 2023 full-year report, the SEC Office of the Whistleblower said it received 18,354 whistleblower tips, a 49% increase from 2022. 
• The jump in tips isn’t quite as dramatic as between 2020 and 2021, which saw an increase of 76%.

Boeing, Boeing: The most high-profile tipsters haven’t been dishing the dirt on Wall Street. Most recently, Boeing and its faults have attracted the most attention, and a new whistleblower went public on Wednesday. Santiago Paredes, who worked for Boeing supplier Spirit AeroSystems until mid-2022 inspecting Boeing 737 fuselages, told CBS News that managers pressured him to minimize reports of any defects. “I almost grew a fear of flying,” Paredes said, adding “Knowing what I know about the 737, it makes me very uncomfortable when I fly on one of them.”