On November 15, the U.S. Commodity Futures Trading Commission (CFTC) Whistleblower Program released its Annual Report for the 2024 Fiscal Year. According to the report, the CFTC received a record 1,744 whistleblower tips and a record 317 award applications during the fiscal year.
The CFTC also reports that it awarded a record 12 whistleblower awards totaling over $42 million to whistleblowers whose disclosures resulted in approximately $162 million in monetary sanctions. Through the CFTC Whistleblower Program qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are eligible to receive monetary awards of 10-30% of the sanctions collected in the action.
“Today’s report reinforces the importance of the CFTC’s whistleblower program to identifying fraudulent behavior in commodities and derivatives markets” said whistleblower attorney Andrew Feller, Co-Chair of Kohn, Kohn & Colapinto’s Securities and Commodities Whistleblower Group.
Cryptocurrency fraud remains the number one area for CFTC whistleblower tips according to the report. Whistleblowers have made disclosures relating to pump and dump scams, fraudulent representations of opportunities, and refusal to honor customer requests to withdraw funds.
“The CFTC’s report confirms what the whistleblower community knows: whistleblower award programs generate massive income for the government, paid directly from fraudsters,” said whistleblower attorney Stephen M. Kohn, founding partner of Kohn, Kohn & Colapinto. “In FY 2024 the CFTC Whistleblower Office had a budget of only $3.595 million, but whistleblower cases resulted in $162 million in sanctions collected by the government. That’s a rate of return of over 4600%.”
“The CFTC Whistleblower Program continues to be a glowing success, but we are disappointed that more awards were not paid,” added Kohn. “Congress needs to fix the slow processing of awards. The CFTC program, along with similar programs administered by the IRS, SEC, and FinCEN, need to be fully supported with sufficient enforcement staffs in order that whistleblower cases can be processed quickly. We are aware of extremely meritorious award applications sitting in limbo for over 4 years.”
“The impressive growth in the number of tips and award applications demonstrate the need to ensure that the CFTC’s program is adequately resourced so it can continue to play its vital role in protecting customers and market integrity,” Feller further stated.
The CFTC Whistleblower Program has allowed the CFTC to recover over $3.2 billion from fraudsters since it was established in 2010. It has correspondingly awarded over $390 million to qualified whistleblowers. According to the CFTC, approximately 30% of all the agency’s enforcement actions involve whistleblowers.
The program is in danger of being a victim of its own success, however. In 2021, Congress passed an emergency short-term fix to save the program from collapse by creating a separate fund to finance the CFTC Whistleblower Office. This ensured that even if large awards depleted the fund, the Office could continue to function. This emergency fix is set to expire at the end of September, which would leave the CFTC Whistleblower Program in danger of financial collapse.
National Whistleblower Center (NWC) is calling on Congress to immediately pass emergency legislation to extend the separate funding for the CFTC Whistleblower Office in order to ensure this vital program does not become a victim of its own success.
NWC has set up an Action Alert allowing whistleblower supporters to write to their members of Congress calling for immediate action on the issue.
Join NWC in Taking Action:
Save the CFTC Whistleblower Program from Financial Collapse
Further Reading:
CFTC Whistleblower Program 2024 Annual Report
CFTC Whistleblower Program Doomed Without Congressional Intervention
