CFTC Whistleblower Nets $10 Million

CFTC Whistleblower Program

A whistleblower who provided the U.S. Commodity Futures Trading Commission with “useful information at the earliest stages of the investigation” and supplemental information later on will be awarded $10 million.

The CFTC’s Whistleblower Program was created with the passage of the Dodd-Frank Act in 2010. Under the program, whistleblowers can receive 10 to 30 percent of monetary sanctions collected in an action. CFTC whistleblower awards are paid out of the CFTC Customer Protection Fund, which consists of “monetary sanctions paid to the CFTC by violators of the [Commodity Exchange Act].” the March 18 press release states.

According to the award order, the CFTC’s Claims Review Staff (CRS) determined that the whistleblower in this case, Claimant 1, “voluntarily provided the Commission with original information that led to the successful enforcement of a covered action.” The order states: “Claimant 1 is a whistleblower because Claimant 1 submitted information on a Form TCR regarding potential violations of the CEA.”

The order adds that the whistleblower in this case “was not under any legal obligation to report to the Commission” and notes that the information they provided was “original.” The whistleblower’s original information thus “led the Commission to open an investigation.”

The award order contains detailed information about how the procedures for determining the award amount for a whistleblower, stating: “The determination of the appropriate percentage of a whistleblower award involves a highly individualized review of the facts and circumstances.” The order explains that the whistleblower in this case “provided good background information” and other assistance but states that “the breakthrough in the investigations came not from Claimant 1’s information” but from something else that is redacted in the document.

Since issuing its first award in 2014, the CFTC has doled out approximately $330 million in whistleblower awards in connection to “enforcement actions that have resulted in monetary sanctions totaling more than $3 billion.”

“This award demonstrates the continued success of the CFTC’s Whistleblower Program,” said Acting Director of Enforcement Vincent McGonagle in the press release. “The CFTC is committed to rewarding whistleblowers who identify misconduct in our markets.”

“The CFTC has granted a number of multimillion-dollar whistleblower awards to date,” added Whistleblower Office Director Christopher Ehrman. “These large awards are putting market participants on notice that whistleblowers continue to provide significant information to the Commission.“

The CFTC whistleblower program continues to be a tremendous success,” stated whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Congress needs to fully fund this critical anti-corruption program that brings in billions of dollars in sanctions.”

Read the press release here.

Read the award order here.

Read more CFTC news on WNN.

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