Whistleblower Alert! CFTC Awards Whistleblower Over $18 Million, Meaning the Penalty Levied Ranged Between $60 Million and $180 Million.
Press Release
The Commodity Futures Trading Commission today announced an award of over $18 million to a whistleblower who provided detailed information and assistance in a CFTC enforcement action and in a related action by another agency. The whistleblower provided assistance to the Division of Enforcement’s (DOE) staff that was significant in amount and quality. The whistleblower’s communications with the other agency led to a related action and were crucial to its resolution.
“This award appropriately rewards a whistleblower who gave valuable information during multiple contacts with DOE staff,” said Ian McGinley, Director of the Division of Enforcement. “The CFTC’s enforcement efforts benefit greatly from whistleblowers like this one, who provide and interpret key evidence and thereby conserve CFTC resources.”
“This whistleblower contributed critical information and assistance to two agencies’ investigations,” said Whistleblower Office Acting Director Christina McGlosson. “With this award, our whistleblower program continues to incentivize whistleblowers to report directly to the CFTC with actionable information.”
About the CFTC’s Whistleblower Program
The Whistleblower Program was created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Since issuing its first award in 2014, the CFTC has granted whistleblower awards amounting to approximately $365 million. Those awards are associated with enforcement actions that have resulted in monetary sanctions totaling more than $3 billion. The CFTC issues awards related not only to the agency’s enforcement actions, but also in connection with related actions brought by other domestic or foreign regulators, if certain conditions are met..
The Commodity Exchange Act (CEA) provides confidentiality protections for whistleblowers. Regardless of whether the CFTC grants an award, the CFTC will not disclose any information that could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances. Consistent with this confidentiality protection, the CFTC will not disclose the name of the enforcement action in which the whistleblower provided information or the exact dollar amount of the award granted.
Whistleblowers may be eligible to receive between 10 and 30 percent of the monetary sanctions collected. All whistleblower awards are paid from the CFTC’s Customer Protection Fund, which was established by Congress, and is financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from injured customers to fund the program.
* * * * *
Anyone with information related to potential violations of the CEA or the CFTC’s rules and regulations can submit a tip electronically by filing a Form TCR (Tip, Complaint or Referral) online.
TLDRS:
- CFTC Awards Whistleblower Over $18 Million, Meaning the Penalty Levied Ranged Between $60 Million and $180 Million.
- "For the determination of the appropriate award percentage, three factors are especially relevant here. First, the Commission believes an award above the minimum 10% is warranted."
- "Specifically, Division staff noted that Claimant's documents would have been useful for litigation that might have taken place, and that Division staff might not have been able to establish certain facts underlying the Covered Action without Claimant's information"
- "This information included both information that Claimant provided from nonpublic sources and Claimant's analysis of publicly available information, so that these types of information respectively derived from his/her independent knowledge and independent analysis. See id. 26(aX4)(A); 17 CFR. $ 165.2(g)-(h). The record, which the CRS reviewed, contains numerous examples of original information that Claimant provided Division staff following the Online Report"
- Since issuing its first award in 2014, the CFTC has granted whistleblower awards amounting to approximately $365 million. Those awards are associated with enforcement actions that have resulted in monetary sanctions totaling more than $3 billion.
- For comparison, since the inception of its program in 2012, the SEC has paid more than $1.3 billion in 300+ awards to whistleblowers.
