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On March 26, 2025, Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Senate Banking Committee Ranking Member Elizabeth Warren (D-Mass.) reintroduced legislation to strengthen whistleblower protections at the Securities and Exchange Commission (SEC).
This is welcome news, as the bipartisan SEC Whistleblower Reform Act of 2025 aims to ensure timely processing of whistleblower claims and protect whistleblowers from retaliation. Shortly after the announcement, National Whistleblower Center (NWC) urged whistleblower supporters to take immediate action by contacting their Representatives, Senators, and the White House, to pass the bill.
But what is the SEC Whistleblower Reform Act and why is it so vital?
In this Sunday Read we will examine what the SEC Whistleblower Reform Act can potentially do, how it will strengthen existing laws, and how you can help get it passed!
A Brief History of the SEC Whistleblower Reform Act
The SEC Whistleblower Reform Act is connected to the Dodd-Frank Act, known formally as the Dodd-Frank Wall Street Reform and Consumer Protection Act. It was signed into law July 21, 2010, and is a major piece of reform legislation covering commodities and securities actions worldwide. The Act was drafted to regain public trust in U.S. financial systems following the financial crisis of 2008, particularly by improving accountability and transparency in banking and finance sectors.
It also incentivized and empowered whistleblowers to come forward. 15 U.S.C. § 78u-6(b)(1) of the Dodd-Frank Act gives the SEC the power to give whistleblowers who provide original information that leads to a successful SEC enforcement 10% to 30% of the monetary sanctions over $1 million.
The SEC whistleblower program also prohibits retaliation by employers against employees who provide the SEC with information about possible securities violations.
Whistleblowers with direct knowledge of fraud, waste, abuse or money laundering schemes are critical to proper SEC enforcement. One notable example occurred in 2018, when the SEC awarded $83 million to three whistleblowers whose information led to a significant enforcement action against Merrill Lynch.
The whistleblowers provided critical information about Merrill Lynch’s misuse of customer funds in violation of SEC regulations. Allegations against Merrill Lynch included improperly using customer cash to finance its own trading activities rather than safeguarding the funds as required by law. The SEC’s enforcement action resulted in Merrill Lynch agreeing to pay $415 million to settle the charges.
On Incentivizing Whistleblowers
If the SEC sanctions a company/individual at least $1 million, the “related action” provisions of the law kick in. Under the related action provisions, a whistleblower can also obtain a reward of 10%-30% on sanctions obtained by other government agencies, if these agencies relied upon the information the whistleblower provided to the SEC.
Since its inception, the SEC Whistleblower Program has recouped more than $6.3 billion in sanctions and returned $1.5 billion to harmed investors. The program’s strong anti-retaliation protections incentivize whistleblowers and are largely responsible for its success. However, a 2018 court ruling stripped these anti-retaliation protections from individuals who report to internal compliance programs.
How Will the Reform Act Improve the Existing law?
The bipartisan SEC Whistleblower Reform Act of 2025 introduces critical updates:
- Protect whistleblowers who report violations to a direct superior from retaliation. Currently, they are only protected if they report directly to the SEC or certain officials.
- Ensure that claims and awards are processed in a timely manner. Although the SEC has recently improved, it previously had a years-long backlog of claims.
- Clarify that whistleblowers cannot waive their rights through a pre-dispute arbitration agreement.
“Patriotic whistleblowers root out waste, fraud and abuse taking place in the shadows, and we should thank them for recovering billions of valuable taxpayer dollars,” said Grassley, a longtime NWC ally who has publicly called for a National Whistleblower Day. “I’m proud to reintroduce this legislation to increase government accountability by safeguarding the SEC’s Whistleblower Program.”
How You Can Help
With strong bipartisan support, Congress could unite across party lines by passing the SEC Whistleblower Reform Act of 2025. Co-sponsored by Senators Collins (R-ME), Warnock (D-GA) and Cortez Masto (D-NV), this legislation is designed to address current loopholes and make critical improvements to the SEC’s existing program.
The public can demand action. NWC issued an Action Alert allowing individuals to write to Congress calling for the passage of the bipartisan SEC Whistleblower Reform Act.
“It is a bipartisan, common-sense legislation,” noted NWC Chairman of the Board Stephen M. Kohn. “It rebuilds the protective framework for whistleblowers that made the SEC Whistleblower Program a success.”
Resources for Whistleblowers
Visit the NWC resources to learn more about Dodd-Frank’s lasting impact.
The decision to come forward is not one to be taken lightly, nor should selecting a whistleblower lawyer. NWC provides resources that can connect you with the right legal professional prior to taking any action.
Support NWC
NWC works tirelessly to strengthen whistleblower programs and educate the public about their value. As a 501(c)(3) nonprofit, our work relies on donors like you.
Donate $100 today to help us continue advocating for whistleblowers.
Special Offer: Donors of $50 or more will receive a free copy of Stephen M. Kohn’s latest book, Rules for Whistleblowers: A Handbook for Doing What’s Right.
This story was written by Justin Smulison, a professional writer, podcaster, and event host based in New York.
