The Commodity Futures Trading Commission (CFTC) has announced a whistleblower award totalling more than USD2 million to be paid to an individual whistleblower.
The CFTC granted the whistleblower’s award application for both a CFTC action and a related action brought by another federal regulator. In ordering the award, the CFTC recognises the contribution of a whistleblower in providing critical information through independent analysis of market data.
James McDonald, Director of CFTC’s Division of Enforcement, says: “The Commission is dedicated to working cooperatively with other federal regulators, and this case highlights how successful we can be when we appropriately share high-quality whistleblower information and analysis with our law enforcement partners. I look forward to seeing continued growth in our Whistleblower Program, both in terms of tips received and awards ordered.”
“Today’s award illustrates two key aspects of our Whistleblower Program – that an individual doesn’t have to be an insider to receive a whistleblower award and the Commission can pay awards based on related actions brought by other regulators,” says Christopher Ehrman, Director of CFTC’s Whistleblower Office. “I expect more awards to be issued to whistleblowers who provide our Enforcement Division with information based on their expert analysis of market data and to whistleblowers based on related actions.”
CFTC’s Whistleblower Program was created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFTC can pay awards not only on CFTC enforcement actions, but also on related actions brought by other federal regulators if certain conditions are met. Whistleblowers are eligible to receive between 10 and 30 per cent of the monetary sanctions collected.
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 which could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances such as when disclosure is required in connection with a public proceeding, or when the Director of the Division of Enforcement exercises his/her authority to share important information with other regulators. Consistent with this confidentiality requirement, 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.
All whistleblower awards are paid from the CFTC Customer Protection Fund established by Congress and financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from harmed investors to fund the program.
Since issuing its first award in 2014, through 2018, the CFTC has awarded more than USD85 million to whistleblowers. The Division of Enforcement actions associated with those awards have resulted in sanctions orders totalling more than USD675 million.