On September 23, the U.S. Commodity Futures Trading Commission (CFTC) announced four whistleblower award orders totaling $4.5 million. The four award orders are the most issued by the CFTC Whistleblower Program in a single day.
The orders awarded seven individual whistleblowers, who included victims of fraud, employees and market participants. Through the CFTC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information which leads to a successful enforcement action, are eligible to receive monetary awards of 10-30% of the sanctions collected in the enforcement actions aided by their disclosures.
“Whistleblowers provide information from a variety of vantage points that helps preserve market integrity and fairness,” said Director of Enforcement Ian McGinley. “The multiple awards the CFTC is granting today serve as a warning to would-be wrongdoers across the markets we oversee that anyone may blow the whistle on their misconduct.”
In its press release, the CFTC detailed the four award orders and the awarded whistleblowers:
- “Four whistleblowers who, as victims of fraud, significantly contributed to the resolution of both a CFTC action and a related criminal action, providing insight into the broad scope of the misconduct and enabling the identification of additional victims.
- A separate whistleblower victim whose tip alerted the CFTC to a new fraud by a repeat offender, and whose ongoing assistance helped uncover additional evidence of misconduct that led to additional charges.
- A market participant whistleblower whose information led the CFTC to look into different conduct as part of an existing investigation, and which led directly to important evidence supporting the CFTC’s charges.
- A whistleblower who, as an employee with compliance/internal audit responsibilities, reported violations internally, then waited at least 120 days to contact the CFTC after no meaningful remedial action was taken. The award for this whistleblower is the second involving the CFTC’s 120-day safe harbor provision for such employees, following the first such award earlier this year.”
“Today’s awards illustrate the CFTC’s Whistleblower Program is open to nearly anyone who voluntarily provides original information about a violation, including victims, witnesses, insiders, market participants, and employees,” said Whistleblower Office Director Brian Young. “Our Whistleblower Program remains committed to rewarding meritorious whistleblowers expeditiously for their information and assistance.”
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 $380 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 Announces Four Orders Granting Whistleblower Awards – Marking the Most in a Single Day
CFTC Whistleblower Program in Danger of Collapse as Funding Fix is Set to Expire
CFTC Whistleblower Program Doomed Without Congressional Intervention