On May 29, the U.S. Commodity Futures Trading Commission (CFTC) announced a $700,000 whistleblower award granted to an individual who voluntarily provided original information that led to a successful enforcement action.
According to the CFTC, the whistleblower’s disclosure “prompted the CFTC to open the investigation and described the misconduct that ultimately appeared in the order.” The Commission further notes that the whistleblower “also provided substantial assistance and helped the Commission conserve resources during the investigation.”
“Whistleblowers often provide the most valuable evidence about wrongdoing,” said Brian Young, director of the Division of Enforcement. “Today’s award recognizes the courage it takes to come forward to the CFTC, as well as the critical role whistleblowers play in the CFTC’s enforcement efforts.”
“We appreciate that the Commission granted this award to a whistleblower who provided key evidence and helped the CFTC interpret it,” said Cynthia Lie, acting director of the CFTC’s Whistleblower Office. “The Whistleblower Office is committed to rewarding whistleblowers for their significant contributions in identifying fraud, manipulation, and abuse in commodity markets.”
Qualified CFTC whistleblowers are eligible to receive monetary awards of 10-30% of the proceeds collected in the enforcement action aided by the disclosure. The CFTC weighs a number of factors in determining the exact percentage to award a whistleblower. In this case, the CFTC negatively weighed the facts that the whistleblower unreasonably delayed in reporting the misconduct and was culpable in the wrongdoing.
The CFTC Whistleblower Program has allowed the CFTC to recover over $3.2 billion from fraudsters since it was established in 2010. It has correspondingly awarded over $390 million to qualified whistleblowers. According to the CFTC, approximately 42% of all the agency’s enforcement actions involve whistleblowers.
The program is in danger of being a victim of its own success, however, as the fund used to finance awards and operations has been in danger of being depleted due to a cap on the fund. In March, Congress extended an emergency fix to the program.
Advocates, members of Congress and CFTC officials have all called for a long-term solution to the CFTC Whistleblower Program’s funding issue. The bipartisan CFTC Whistleblower Fund Improvement Act of 2023 would provide a sustainable solution by raising the cap on the fund to $300 million and making permanent the separate fund for the Whistleblower Office.
National Whistleblower Center has issued an Action Alert allowing individuals to write to their members of Congress calling for the passage of the CFTC Whistleblower Fund Improvement Act to permanently solve the CFTC Whistleblower Program’s funding crisis.
Further Reading:
CFTC Awards Approximately $700,000 to Whistleblower
CFTC Whistleblower Program Doomed Without Congressional Intervention
