The U.S. Securities and Exchange Commission received more than 3,500 tips from whistleblowers in fiscal year 2014, the largest number received since the program went into effect three years ago.
The SEC announced the increase in its Nov. 17 annual report, which tracks the success of the whistleblower program and how much it pays out each year in awards.
Fiscal 2014, which ended Sept. 30, marked a record year for the SEC’s program, both in terms of the number of tips received and the amounts it awarded tipsters.
It authorized awards for nine whistleblowers, including a record payout of more than $30 million to a whistleblower overseas who had helped alert the SEC to what it described as an ongoing fraud.
The 2010 Dodd-Frank Wall Street reform law gave the SEC the power to start a whistleblower program that lets the agency reward people who report misconduct, if that tip leads to the collection of more than $1 million in monetary sanctions.
The program was inspired in part by the Bernard Madoff scandal, in which the SEC received numerous tips about his Ponzi scheme but failed to detect the fraud for decades.
According to the SEC’s report, the agency received 3,620 tips from whistleblowers in fiscal 2014, compared with 3,238 in fiscal 2013.
The SEC said it fielded over 2,700 phone calls from members of the public. It received tips from every state as well as Washington, D.C. and Puerto Rico. The states where the most tips originated included California, Florida, New York and Texas.
It also got tips from outside the United States, with the bulk of those coming from Britain, India, Canada, China and Australia.
The SEC added that “significant” additional payments also were made to people who received awards in other years because it has since been able to collect more money from a variety of enforcement actions.
One whistleblower, for example, saw the award increase from an initial $50,000 to more than $385,000.
At the same time, the SEC’s report also discussed some of the tips it has rejected during the fiscal year.
In one extreme example, the SEC said it rejected 143 claims submitted by one individual whom the SEC accused of making “false and baseless claims” that harmed the rights of legitimate whistleblowers. The SEC said it previously had rejected another 53 claims from the same person.
(Reporting by Sarah N. Lynch; Editing by Paul Simao)