On November 1, the U.S. Commodity Futures Trading Commission (CFTC) released its 2022 Annual Report on its whistleblower program. The report details a historic fiscal year for the whistleblower program, which included a record whistleblower award and a dramatic increase in whistleblower tips.
“The CFTC’s Whistleblower Program made history this Period with the issuance of a record-breaking award of nearly $200 million to a single whistleblower, the largest whistleblower award ever granted under the Dodd-Frank Act,” the report states.
In addition to the $200 million award issued on October 21, 2021, the report details the nine other whistleblower awards issued during the 2022 fiscal year. According to the report, with the 10 awards granted this year, “the total sanctions ordered in all whistleblower-related enforcement actions surpassed the $3 billion milestone.”
“The CFTC whistleblower award program is often overlooked but it covers a wide range of financial fraud and has recently racked up some impressive successes,” said whistleblower attorney David Colapinto of Kohn, Kohn & Colapinto.
The report also highlights the large increase in whistleblower tips received by the CFTC over the course of the 2022 fiscal year. The agency received 1,506 whistleblower tips, compared to 961 received in the 2021 fiscal year.
According to the report, “[t]he majority of tips received during the Period involved fraudulent misappropriation and fraudulent solicitation involving crypto/digital assets (e.g., pump-and dumps, fraudulent representations of opportunities, or refusals to honor withdrawal requests).”
The report further details other types of activities disclosed in whistleblower tips, including “record keeping or registration violations, illegal swap dealer business conduct, solicitation, misappropriation, insider trading, and other types of fraud, use of deceptive or manipulative devices in trading, as well as spoofing, and other forms of disruptive trading or market manipulation.”
In the report, the CFTC also highlights its informational website about the whistleblower program. “During the Period, the website received almost 562,000 pageviews – a new record for views of the CFTC’s Whistleblower Program website over the course of a year,” the report states.
Through the CFTC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information about commodities law violations that contributes to a successful enforcement action, are entitled to monetary awards of 10-30% of the funds collected by the government.