Commodities crime keeps the CFTC financial whistleblower program busy

The Commodity Futures Trading Commission (CFTC) financial whistleblower program has been busy, most lately announcing a $2 million award to “two model whistleblowers who provided the agency with significant information that prompted the CFTC to open an investigation….The multiple interviews and numerous documents the whistleblowers provided were highly informative and formed the basis of the CFTC’s investigation.”

In June, the agency announced a $2.5 million award, which followed a $1.5 million reward announced in May. The agency reports awarding more than $87 million to whistleblowers between 2014 and 2018.

The agency is committed to the program, according to a quote from director James McDonald in a press release announcing the May award.

Today’s award stands as one in a growing line of whistleblower awards that show the Commission’s continued commitment to the program. Whistleblowers have become an integral part of our enforcement efforts, and I expect that trend to continue going forward.

In 2018, the commission reported five whistleblower awards totaling more than $75 million. They included a $30 million settlement against JPMorgan, the largest-ever awarded by the CFTC, and the first award to a foreign whistleblower.

According to the report, the agency received tips and complaints on the following:

(S)poofing and other forms of disruptive trading, market manipulation, wash trading, false reporting, misrepresentations to customers regarding the handling of their accounts, fraud involving virtual currencies, precious metals, or foreign currency exchange, as well as Ponzi schemes and other off-exchange investment scams involving futures.

 The Dodd-Frank Act covers commodities and securities actions worldwide. CFTC whistleblowers remain anonymous and are entitled to 10% to 30% of the monetary sanctions over $1 million.

 According to the CFTC whistleblower page by the National Whistleblower Center:

 The Act is meant primarily to promote financial stability by improving accountability and transparency in the financial system. The DFA contained three major whistleblower laws, one covering the Commodity Exchange Act, one cover the Consumer Financial Protection Board and another covering the Security and Exchange Act.