Under the Trump administration, the SEC has taken a sledgehammer to enforcement against corporate crimes, with cases dropping to record lows — at the same time that corporate lobbying of the federal government has surged to unprecedented levels.
The Trump administration has effectively silenced a successful financial whistleblower recruitment program that encouraged industry insiders to report white-collar crimes and led regulators to return $1.5 billion in ill-gotten gains to investors.
The US Securities and Exchange Commission (SEC), which regulates stock and bond markets, has declined to award a single dollar to whistleblowers in the first three months of fiscal year 2026 after denying a record number of these claims in 2025. Payments are made to individuals who provide “specific, timely, and credible” reports of violations of securities law that result in sanctions exceeding $1 million; awards range from 10 to 30 percent of the fines collected. Whistleblower payments have not bottomed out to this extent since 2017 under the Obama administration.
Created under the Dodd-Frank Act in the wake of the 2008 financial crisis, the program has paid 444 individual whistleblowers more than $2.2 billion for their successful tips since its 2011 inception. Awards were especially high in the final year of the Biden administration, when commissioners paid out more than $255 million to forty-seven whistleblowers, the third-largest annual total in the program’s history.
The whistleblower program “directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest,” the SEC’s then-director of enforcement boasted in 2023, including $1.5 billion returned directly to harmed investors.
In a 2020 statement, former SEC chairman Jay Cutler identified the program as a “critical component of the Commission’s efforts to detect wrongdoing and protect investors and the marketplace, particularly where fraud is well-hidden or difficult to detect.”
Current SEC chair Paul Atkins has a different view. In a 2011 testimony before Congress, Atkins (then a visiting scholar at the American Enterprise Institute, a conservative think tank) argued that the whistleblower program presents “perverse incentives” and “sets up a system that has many inherent problems.”
“The unintended consequences of unfounded charges from disgruntled employees with ulterior motives will be devastating for shareholders,” Atkins said. “The bounties available to whistleblowers (and their attorneys) are so large . . . whistleblowers are incentivized to ‘report out’ directly to the SEC rather than to ‘report up’ through their companies’ compliance programs.”
Atkins’s SEC has since taken a sledgehammer to enforcement against corporate crimes. The agency’s enforcement cases have fallen to a record low, with Atkins pursuing 30 percent fewer enforcement actions against corporations than Biden-era regulators in 2024.
Last year, regulators across all federal agencies canceled 145 enforcement actions against 153 corporations “facing federal investigations, enforcement lawsuits, or other accountability measures for alleged lawbreaking,” according to a report by consumer advocacy group Public Citizen.
This comes as corporate lobbying of the federal government reaches record highs. A recent study in the Journal of Contemporary Accounting & Economics finds that firms that habitually lobby the SEC are more likely to be investigated by the agency. But the report also found that companies under investigation that boost lobbying expenditures “especially toward SEC-relevant committees in Congress” are less likely to face enforcement.
Overall, SEC investigations prompt corporations to increase their lobbying expenditures by an average of 32 percent.
This article was first published by the Lever, an award-winning independent investigative newsroom.