On October 31, the U.S. Commodity Futures Trading Commission (CFTC) released its Annual Report on the CFTC Whistleblower Program for the 2023 Fiscal Year (FY 2023). In the report, the agency revealed that it received a record 1,530 whistleblower tips in FY 2023.
The CFTC further reports that since the program was established in 2010 it has “issued 41 orders granting awards totaling almost $350 million.” In FY 2023, the agency issued seven awards totaling $16 million.
“The CFTC is the little engine that could,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Their staff has a strong reputation of being attuned to the problems that whistleblowers face. This report showcases the continued success of the agency’s whistleblower program.”
“The CFTC’s Whistleblower Program recognizes that whistleblowers put themselves at considerable professional and reputational risk in order to help the government,” said CFTC Commissioner Christy Goldsmith Romero. “The Program provides confidential protection to whistleblowers. The Program also recognizes that incentives in the forms of monetary awards increase the number of whistleblower tips. This Report confirms that fact, with 1,530 tips this year, the highest of any year.”
Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), recently revealed that the SEC Whistleblower Program also received a record number of whistleblower tips in FY 2023.
The CFTC’s record number of whistleblower tips underscores the continued growth of the program. As recently as FY 2019, the CFTC Whistleblower Program only received 455 tips.
“The record number of whistleblower tips highlights the CFTC Whistleblower Program’s remarkable growth in recent years, which has led to a funding crisis for the program. It is absolutely essential that Congress passes the bipartisan CFTC Whistleblower Fund Improvement Act to ensure that whistleblowers can continue to support the CFTC’s critical anti-fraud initiatives.”
Introduced in July by a bipartisan group of senators, the CFTC Whistleblower Fund Improvement Act of 2023 addresses a funding crisis which is undermining the CFTC Whistleblower Program. The program’s growth has led to this crisis due to a cap on the fund used to finance the program. The CFTC Whistleblower Fund Improvement Act raises this cap, which has not been changed since it was instituted in 2010.
“The bipartisan Whistleblower Fund Improvement Act will ensure that the CFTC whistleblower program will not be a victim of its own success and can continue to help root out fraud in the U.S. derivatives markets,” wrote Kohn in an article calling for the passage of the bill.
According to the CFTC’s report, during FY 2023, the CFTC Whistleblower Program “received tips and complaints regarding activities including but not limited to market manipulation, spoofing, insider trading, corruption, illegal swap dealer business conduct, recordkeeping or registration violations, and fraud or manipulation related to digital assets, precious metals, and forex trading.”
The report also notes that a majority of the tips concerned allegations of crypto fraud, which has become a central aspect of the CFTC’s enforcement efforts.
“Whistleblowers play a vital role in supporting CFTC investigations related to fraud and other illegality,” Commissioner Romero further stated. “The CFTC could not fully protect customers and markets without whistleblowers. Whistleblowers help identify fraud and other illegality, interpret key evidence, and save considerable Commission resources and time. The faster we can stop fraud, the more we can protect customers from harm.”