Saturday, July 13, 2019
The Commodity Futures Trading Commission (CFTC) announced today an award of approximately $2 million to two model whistleblowers who provided the agency with significant information that prompted the CFTC to open an investigation.
The CFTC found numerous violations of the Commodity Exchange Act (CEA) that were directly based on information from the whistleblowers. The multiple interviews and numerous documents the whistleblowers provided were highly informative and formed the basis of the CFTC’s investigation. The whistleblowers also reported the same information to another organization, which conducted a separate investigation and shared its findings with the CFTC. Those findings significantly assisted the CFTC in building its case. The award will be divided evenly between the whistleblowers because they jointly submitted the tip and award application to the CFTC.
“This award demonstrates how whistleblowers can play an integral role in our investigations and be rewarded for their significant contributions,” said Christopher Ehrman, Director of the CFTC’s Whistleblower Office. “It often takes integrity and courage to report specific, timely, and credible information about misconduct, and such information enhances our ability to police the markets.”
Since establishing the Whistleblower Program, the CFTC has awarded more than $90 million to whistleblowers, while CFTC actions associated with those awards have resulted in sanctions orders totaling more than $730 million. The largest single award was approximately $30 million paid to one whistleblower.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created the CFTC’s Whistleblower Program. Whistleblower awards can range from 10 to 30 percent of the money collected in actions where the amount of sanctions ordered exceeds $1 million. The CFTC pays all whistleblower awards out of the CFTC’s Customer Protection Fund, established by Congress and financed entirely through sanctions paid to the CFTC by violators of the CEA. The CFTC does not take or withhold any money from victims to fund the program.
The Whistleblower Program provides all whistleblowers with confidentiality protections regardless of whether the CFTC ultimately issues awards. The CFTC will not disclose any information which could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances such as when disclosure is required in connection with a public proceeding. Consistent with this confidentiality requirement, the CFTC will not disclose the name of the enforcement action in which the whistleblower provided information, the award percentage granted to the whistleblower, and the exact dollar amount of the award granted.
The Whistleblower Program also provides whistleblowers with anti-retaliation protections. A person may not take any action to impede an individual from communicating directly with the CFTC’s staff about a possible violation of the CEA, including by enforcing, or threatening to enforce, a confidentiality agreement or pre-dispute arbitration agreement regarding such communications.