On August 9, the U.S. Commodity Futures Trading Commission (CFTC) Whistleblower Office posted Notices of Covered Actions (NCAs) for recordkeeping charges filed against major financial institutions. The NCAs signal that the CFTC is now accepting whistleblower award claims for the enforcement actions.
On August 8, the CFTC announced that it had settled charges against swap dealer and futures commission merchant (FCM) affiliates of four financial institutions: BNP Paribas, Société Générale, Wells Fargo, and Bank of Montreal. The CFTC charged the institutions with “failing to maintain, preserve, or produce records that were required to be kept under CFTC recordkeeping requirements, and failing to diligently supervise matters related to their businesses as CFTC registrants.”
In total the four institutions agreed to pay the CFTC a total of $260 million to settle the charges.
“With today’s actions, the CFTC has now brought enforcement actions against 18 financial institutions, and imposed over $1 billion in penalties, for violations of the CFTC’s recordkeeping and supervision requirements involving the use of unapproved communication methods,” said Director of Enforcement Ian McGinley. “The Commission’s message could not be more clear—recordkeeping and supervision requirements are fundamental, and registrants that fail to comply with these core regulatory obligations do so at their own peril.”
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 the funds collected by the CFTC in the enforcement action.
“Roughly 30 percent of all CFTC enforcement investigations stem from whistleblowers, and information from whistleblowers assisted in enforcement actions totaling more than $3 billion,” the CFTC recently informed WNN. “The CFTC’s Whistleblower Office issues alerts to the public to encourage potential whistleblowers to come forward to help hold wrongdoers accountable.”
“The Commodity Futures Trading Commission recognizes the critical role whistleblowers play in our enforcement program every day,” said Acting Director of the CFTC’s Whistleblower Office Christina McGlosson.
A bipartisan bill introduced in July provides a long-term fix to the funding issue undermining the CFTC Whistleblower Program. The CFTC Whistleblower Fund Improvement Act is widely supported by whistleblower advocates.
Further Reading:
CFTC Notice of Covered Actions
“Urgently Needed” CFTC Whistleblower Funding Bill Introduced