CFTC Surpasses $1 Billion in Sanctions Caused by Whistleblower Tips; Issues $3 Million Whistleblower Award

CFTC Whistleblower Program

On April 23, the U.S. Commodity Futures Trading Commission (CFTC) announced an approximately $3 million award to a whistleblower who provided the agency with original information that helped lead to a successful enforcement action. The CFTC also announced that with the award, the agency has now recovered over $1 billion in cases for which they issued a whistleblower award.

“This milestone illustrates that the CFTC’s Whistleblower Program has had a tremendous impact on increasing our enforcement efforts in its short history,” said CFTC Acting Director of Enforcement Vincent McGonagle. “In many of our actions, whistleblowers’ assistance has been critical in revealing wrongdoing, and their tips ultimately conserve the CFTC’s time and resources.”

According to the CFTC, the awarded whistleblower provided a “specific, credible, and timely tip” which “led the CFTC to open an investigation and ultimately bring a successful enforcement action.” In the award order, the SEC also notes that the whistleblower’s disclosure was voluntary because the whistleblower “was not under any legal obligation to report to the Commission.”

Through the CFTC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government in the action. According to the CFTC, since issuing its first award in 2014, the program has awarded approximately $123 million to whistleblowers.

As noted by McGonagle, the CFTC Whistleblower Program has been a massive success for the agency. However, its recent growth and success are threatening to undermine the program. The CFTC’s Consumer Protection Fund, the exclusive fund used to pay CFTC whistleblower awards, is at risk of being depleted. The Fund is entirely financed by sanctions paid to the CFTC by fraudsters; however, when Congress established the Fund in 2010 alongside the CFTC Whistleblower Program, it placed a $100 million cap on the Fund.

The recent success of the program has depleted the Fund so significantly that CFTC officials recently informed Senator Chuck Grassley (R-IA) that the agency is postponing the issuance of some rewards. On February 24, Grassley and a bipartisan group of Senators introduced the CFTC Fund Management Act, which would raise the cap on the Fund from $100 million to $150 million. The Fund would continue to be entirely financed by sanctions and the raised cap would allow the CFTC to issue awards to deserving whistleblowers in a timely manner.

“The CFTC whistleblower program has become far more successful than Congress imagined when we set it up back in 2010,” said Grassley in a press release about the bill. “We can’t allow this program to become a victim of its own success. Congress has to pass this bill now to ensure that the CFTC whistleblower program remains solvent and can continue to grow.”

“Rooting out waste, fraud, and abuse is essential to protecting taxpayer dollars, and I am glad to partner with Senator Grassley to help ensure that the incentives for whistleblowers to call out this type of wrongdoing remain in place,” added Senator Maggie Hassan (D-NH) who helped introduce the bill. “By raising the cap on the whistleblower reward fund we will help prevent this successful program from becoming depleted. This is an important bipartisan bill and I urge my colleagues on both sides of the aisle to join us in supporting its swift passage.”


CFTC Awards Approximately $3 Million to Whistleblower

Leading Whistleblower Attorney: The CFTC Whistleblower Program is in Crisis Because of Its Success

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