On May 25, 2015, the Wall Street Journal published an article (subscription required) reporting that tipsters have found it difficult to collect financial awards from the SEC after filing whistleblower claims.

The article quotes whistleblower advocates who claim that the bounty program’s lack of transparency makes it hard for whistleblowers to know whether they are eligible for awards. In addition, because their eligibility for awards depends on whether the SEC actually collects sanctions in connection with a tip, whistleblowers claim that the program does not offer incentives to expose frauds in cases where the SEC may find it difficult to collect.

According to the article, over 10,000 tips have been submitted to the SEC whistleblower program, about 300 people have applied for bounty awards, and 17 payouts have been made. The agency has declined to say how much money it has collected from any of the enforcement actions listed on its website as eligible for bounty awards, or how many claims for bounty awards relate to cases where no bounty is available.

While much of the recent focus has been on the some of the SEC’s very large bounty awards, the data presented in this article points out the extraordinarily low probability of a tip to the SEC leading to a bounty award. Of course, from an employer’s perspective, even the possibility of an SEC investigation prompted by a tipster – no matter how remote – provides ample motive to implement and maintain robust internal reporting processes.