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For years, skeptics questioned whether whistleblower laws actually work. Would financial incentives attract credible whistleblowers or just opportunists? Would protections be strong enough to encourage people to come forward? Would the information whistleblowers provide lead to meaningful enforcement?
The verdict is now clear: whistleblower laws work—and the data proves it.
Over the past several years, a growing body of rigorous academic research has emerged that definitively answers these questions. Studies from leading universities and research institutions demonstrate that well-designed whistleblower programs not only detect fraud that would otherwise go unnoticed but also deter misconduct before it occurs and recover billions of dollars for governments and the public.
This page compiles the most significant recent research on whistleblower effectiveness. Whether you are a policymaker considering new legislation, a researcher studying corporate accountability, or a potential whistleblower weighing your options, this research provides the empirical foundation you need.
Why Whistleblower Laws Are Becoming More Effective
The most successful whistleblower regimes share common elements that research has shown to be essential. Modern laws are improving along several dimensions:
- Whistleblowers are being rewarded for providing information to the government about financial crimes and corruption that violate certain laws.
- Whistleblowers are being protected for coming forward, which means under most laws, they can blow the whistle anonymously or confidentially.
- Whistleblowers are recovering millions, if not billions of dollars for the government for crimes that would have otherwise gone undetected.
- Whistleblower laws in the US are transnational in scope which allows people who are not U.S. citizens to use the laws.
- Whistleblowers are a strong deterrent to help protect governments and the public from risks and dangers that are difficult to detect.
Gaps remain, of course—particularly around funding and the time it takes for agencies like the SEC and IRS to compensate whistleblowers. But the trajectory is unmistakably positive, and the research below demonstrates why.
The Research
This body of research examines three interconnected dimensions of whistleblowing effectiveness: the design and implementation of reward mechanisms, the impact on enforcement outcomes, and the broader deterrent effects on corporate misconduct. Together, these studies make a compelling case that whistleblowers are essential to fighting economic crime.
A. Do Financial Rewards Work?
One of the most contentious questions in whistleblower policy has been whether financial rewards actually improve outcomes. Critics have worried that monetary incentives might attract frivolous tips or undermine intrinsic motivations to report wrongdoing. The research below addresses these concerns directly.
The Role of Financial Rewards for Whistleblowers in the Fight Against Economic Crime
This paper examines the effects of whistleblower incentive programs and assesses whether concerns raised about their implementation have materialized in practice. Additionally, it identifies the factors demonstrated to be essential for such schemes to function effectively within a broader strategy for enhancing economic crime enforcement. The paper concludes by offering insights for policymakers contemplating the adoption of whistleblower reward mechanisms.
Citation: Lockhart, Eliza (2024). “The Role of Financial Rewards for Whistleblowers in the Fight Against Economic Crime.” Royal United Services Institute.
Don’t Forget to Tip the Tipster: How the SEC’s Failure to Financially Reward Media-First Whistleblowers Defies Domestic and International Anti-Corruption Objectives
This paper examines the Securities and Exchange Commission’s exclusion of media-first whistleblowers—individuals who disclose information to journalists before contacting regulators—from its Dodd-Frank whistleblower reward program. Despite the program’s success in generating over $8 billion in sanctions and $2 billion in whistleblower awards since 2010, the SEC’s narrow interpretation of “voluntary” reporting disqualifies otherwise compliant sources who first approach the media.
The analysis demonstrates how this exclusion contradicts both the Biden Administration’s anti-corruption strategy and OECD recommendations, which emphasize collaborative efforts between whistleblowers and journalists in combating fraud. The paper argues that the SEC’s restrictive eligibility criteria are neither necessary nor consistent with Dodd-Frank’s statutory language and Congressional intent, particularly considering the Supreme Court’s decision in Loper Bright eliminating Chevron deference to agency interpretations.
Additionally, the work critiques the SEC’s promotion of internal corporate reporting, documenting how such channels frequently expose whistleblowers to retaliation while enabling corporate cover-ups. The paper concludes by recommending that the SEC expand award eligibility to include media-first whistleblowers and reconsider financial incentives for internal reporting to better align with domestic and international anti-corruption objectives.
Citation: Schepis, Grace. “Don’t Forget to Tip the Tipster: How the SEC’s Failure to Financially Reward Media-First Whistleblowers Defies Domestic and International Anti-Corruption Objectives.” Administrative Law Review 77, no. 2 (2025): 469–501.
A Fresh Look at Whistleblower Rewards
Legislation addressing whistleblower protections and incentives has expanded dramatically in recent years. While the European Union has recently introduced a Directive safeguarding whistleblowers, the United States established a more comprehensive approach decades earlier—not merely protecting whistleblowers but providing significant financial incentives for their disclosures.
This paper examines empirical evidence regarding the efficacy of US whistleblower reward schemes and explores recent developments in this area. It analyzes criticisms of these programs alongside contextual factors within the US legal and cultural environment that may account for their effectiveness. The paper concludes by questioning whether the EU Directive, in its current form, can successfully accomplish its stated goal of strengthening enforcement of Union law.
Citation: Nyreröd, Theo (Stockholm Institute of Transition Economics) and Spagnolo, Giancarlo (University of Rome Tor Vergata), “A Fresh Look at Whistleblower Rewards,” (June 22, 2021).
B. How Do Whistleblowers Impact Enforcement?
Beyond attracting tips, effective whistleblower programs must translate information into enforcement outcomes. The following research examines how whistleblower programs are reshaping regulatory enforcement across multiple agencies and legal frameworks.
Money Laundering and Sanctions Enforcement: Large Rewards, Leniency and Witness Protection for Whistleblowers
As sanctions have emerged as a critical mechanism for isolating authoritarian governments from Western economies, robust enforcement of both sanctions and anti-money laundering (AML) regulations has become increasingly vital. The global AML framework serves as the primary system for identifying sanctions evasion. Yet this framework faces widespread criticism for its lack of effectiveness.
The paper below examines the shortcomings of the existing sanctions and AML enforcement regime and proposes an alternative approach: a whistleblower incentive program designed to facilitate asset seizures that operate independently of the current system’s limitations.
Citation: Theo Nyreröd, Stelios Andreadakis, and Giancarlo Spagnolo, “Money laundering and sanctions enforcement: large rewards, leniency and witness protection for whistleblowers,” Journal of Money Laundering Control (2023) 26 (5): 912–925.
What The CFTC’s Settlement With Vitol Inc. Portends About Enforcement Trends
This paper examines the Commodity Futures Trading Commission’s inaugural enforcement action addressing foreign corruption through commodities market regulations, analyzing the December 2020 settlement with energy trader Vitol Inc.
The analysis explores the CFTC’s novel legal theory connecting corrupt practices to market manipulation and fraud under the Commodity Exchange Act, representing an expansion of traditional anti-corruption enforcement beyond Foreign Corrupt Practices Act authorities. The paper documents the coordinated multi-agency approach involving the CFTC, Department of Justice, and Brazilian regulators in prosecuting corruption-related market misconduct. It identifies the CFTC’s whistleblower incentive program as a catalyst for increased reporting and enforcement activity in this domain.
The authors anticipate continued regulatory convergence as multiple U.S. agencies—including the Federal Reserve and Financial Crimes Enforcement Network—leverage their respective statutory authorities to target foreign corruption from diverse jurisdictional angles. The paper concludes by highlighting implications for energy and commodities firms, emphasizing the need for enhanced compliance programs that address the evolving multi-agency enforcement landscape and the CFTC’s stated commitment to pursuing corruption-based violations in derivatives markets.
Citation: Cohen, Joel M., Jeffrey L. Steiner, Patrick F. Stokes, Lawrence J. Zweifach, Emily A. Cross, and Darcy C. Harris. “What the CFTC’s Settlement with Vitol Inc. Portends About Enforcement Trends.” Gibson Dunn, January 20, 2021.
C. Do Whistleblower Programs Deter Misconduct?
Perhaps the most important question is whether whistleblower programs prevent wrongdoing in the first place. If potential wrongdoers know that insiders might report them, does that knowledge change behavior? The following research provides striking evidence that it does.
The Deterrence Effect of Whistleblowing
This paper documents how the initial disclosure of client data from a tax-haven bank triggered an immediate outflow of deposits from offshore financial centers and a pronounced decline in the market valuation of banks known to facilitate tax evasion.
Banks with the greatest involvement in tax evasion services experienced the most severe losses in market value. While later data breaches produced comparable effects, their magnitude was diminished. These findings indicate that whistleblowing activities targeting tax-haven institutions serve as a deterrent to offshore tax evasion by heightening the perceived risks associated with both engaging in and enabling such practices.
Citation: Niels Johannesen (University of Copenhagen) and Tim B.M. Stolper (Max Planck Institute for Tax Law and Public Finance, Munich, Germany), “The Deterrence Effect of Whistleblowing,” The Journal of Law and Economics, Volume 64, Number 4, University of Chicago (Nov. 2021).
Comprehensive Whistleblower Resources
For those seeking a practical guide that synthesizes this research into actionable guidance, the following resource provides a comprehensive overview of how to navigate the whistleblower landscape.
Rules for Whistleblowers: A Handbook for Doing What’s Right
Rules for Whistleblowers provides a comprehensive practical guide to navigating whistleblower protection and reward mechanisms across federal and state jurisdictions. Drawing on thirty-seven rules, Kohn identifies common pitfalls facing potential whistleblowers and outlines procedures for filing anonymous disclosures and securing financial compensation.
The work addresses complex legal frameworks including the Dodd-Frank Act, IRS whistleblower provisions, and the False Claims Act, while offering strategies for combating workplace retaliation. Additionally, the book examines contentious issues such as the legality of covert recording, document removal, and nondisclosure agreement violations.
The analysis reflects recent legislative developments that have enabled over $10 billion in whistleblower awards and transformed the landscape of corporate accountability and fraud detection.
Citation: Kohn, Stephen, “Rules for Whistleblowers: A Handbook for Doing What’s Right” (Lyons Press 2023).
Conclusion: The Case for Continued Investment
The research compiled here tells a consistent story: whistleblower laws that combine meaningful financial rewards with robust protections produce measurable results. They attract high-quality information, enable successful enforcement actions, and deter misconduct across industries and borders.
For policymakers, the implications are clear. Jurisdictions without effective whistleblower incentive programs are leaving money on the table and allowing misconduct to go undetected. For potential whistleblowers, the landscape has never been more favorable—though navigating the complexities of multiple overlapping programs still requires careful planning.
As legislators continue to strengthen these laws and as more whistleblowers come forward to expose foreign bribery, money laundering, tax evasion, and other financial crimes, the evidence supporting this approach will only grow stronger.
Joseph Orr
Joseph is an author at IWPA and writes about anti-corruption.
