CFTC Whistleblower Reward Lawyers
In July 2010, the Dodd-Frank Act created the U.S. Commodity Futures Trading Commission (CFTC) Whistleblower Reward Program. It provides whistleblowers with a strong monetary incentive, as well as anti-retaliation protections, for reporting wrongdoing to the CFTC. This includes violations or fraud in connection with:
- Commodity futures;
- Commodity options;
- Swap trading markets;
- Derivatives; and
According to the CFTC’s FY 2019 Annual Report, approximately 65% of all cases filed during the fiscal year involved charges of commodities fraud, market manipulation schemes and spoofing.
Since 2014, the CFTC has issued more than $120 million in awards to whistleblowers. The largest CFTC whistleblower awards to date are $45 million, $30 million, and $10 million. Whistleblower disclosures have enabled the CFTC to recover nearly $1 billion. In July 2020, the CFTC awarded $9 million to a whistleblower.
Call our CFTC whistleblower lawyers at 202-930-5901 or contact us here to find out if you are eligible for a CFTC whistleblower award. A delay in reporting commodities fraud can potentially disqualify a whistleblower from recovering an award or can lower a whistleblower award, so call us today for a free consultation. Recently, the Wall Street Journal quoted Matt Stock, Director of our Whistleblower Rewards Practice, in an article titled CFTC Whistleblower Tips and Awards Fall After Record 2018.
CFTC Whistleblower Reward Program
Under the CFTC Whistleblower Reward Program, the CFTC will issue rewards to whistleblowers who provide original information that leads to CFTC enforcement actions with total civil penalties in excess of $1 million (see how the CFTC calculates monetary sanctions). A whistleblower may receive an award of between 10% and 30% of the total monetary sanctions collected.
Original information “leads to” a successful enforcement action if either:
- The original information caused the staff to open an investigation, reopen an investigation, or inquire into different conduct as part of a current investigation, and the Commission brought a successful action based in whole or in part on conduct that was the subject of the original information; or
- The conduct was already under examination or investigation, and the original information significantly contributed to the success of the action.
In determining a reward percentage, the CFTC considers the particular facts and circumstances of each case. For example, positive factors may include the significance of the information, the level of assistance provided by the whistleblower and the whistleblower’s attorney, and the law enforcement interests at stake.
Whistleblowers may still be eligible for a reward under the CFTC Whistleblower Reward Program even if they have already received a reward under the SEC Whistleblower Reward Program.
Anonymous Whistleblowing to the CFTC
If represented by counsel, a whistleblower may submit a tip anonymously to the CFTC. In certain circumstances, a whistleblower may remain anonymous, even to the CFTC, until an award determination. However, even at the time of a reward, a whistleblower’s identity is not made available to the public.
According to a recent report of the CFTC Whistleblower Office, the Office takes steps to protect whistleblower confidentiality. For example, in 2017 the Office considered 267 requests to produce documents from the investigation and litigation files of the Enforcement Division and found 16 requests to implicate whistleblower-identifying information. The Office worked with the Enforcement Division to remove whistleblower-identifying information or otherwise take steps to preserve whistleblower confidentiality.
CFTC Whistleblower Awards
The table below identifies some of the largest CFTC whistleblowers awards:
|Whistleblower Award||Date||Basis for Whistleblower Award|
|$45 million||August 2, 2018||On August 2, 2018, the CFTC announced a $45 million award to multiple whistleblowers. Reports indicate the award was related to ISDAFIX manipulation enforcement actions.|
|$30 million||July 12, 2018||On July 12, 2018, the CFTC announced its largest-ever whistleblower award given to an individual. The whistleblower exposed that JP Morgan did not properly disclose conflicts of interests to clients. Find the order here.|
|$10 million||March 28, 2016||On April 4, 2016, the CFTC announced a $10 million award given to an individual. The whistleblower provided “valuable information” regarding violations of the Commodity Exchange Act. Find the order here.|
|$7 million||September 27, 2019||On September 27, 2019, the CFTC issued a $7 million award to a whistleblower. CFTC Director of Enforcement James McDonald stated in the Press Release: “Forty percent of our investigations now involve whistleblowers. We expect that number to increase as the CFTC continues to expand its whistleblower program.” Find the order here.|
|$6 million||June 9, 2020||On June 9, 2020, the CFTC issued a $6 million award to a whistleblower who voluntarily provided original information that led the CFTC to bring a successful enforcement action. According to the Press Release announcing the award, the CFTC opened its investigation upon receiving the whistleblower’s information, which was specific, credible and timely.|
|$2.5 million||June 24, 2019||On July 24, 2019, the CFTC issued a $2.5 million CFTC whistleblower award to an individual. The award was reduced because of the whistleblower’s delay in reporting. Director McDonald said the delay was “unreasonable” and the whistleblower could have received a larger award had this person not waited. Find the order here.|
|$2 million||July 1, 2019||On July 1, 2019, the CFTC issued a $2 million CFTC whistleblower award to two whistleblowers. The whistleblowers provided multiple interviews and documents that were “highly informative” and provided the agency “with significant information” that prompted the CFTC to open an investigation. The whistleblowers also reported the violations to another organization that conducted a separate investigation and shared its findings with the CFTC. Find the order here.|
|$2 million||March 4, 2019||On March 4, 2019, the CFTC announced an award of over $2 million to a whistleblower. The whistleblower conducted an "independent analysis" of market data, which aided greatly in the CFTC’s investigation. The whistleblower was not an insider. The order is here.|
|$1.5 million||May 6, 2019||On May 6, 2019, the CFTC announced a $1.5 million award to a whistleblower who tried to report it internally first. The CFTC granted the reward to the whistleblower for both a CFTC action and a related action brought by another federal regulator. Find the order here.|
|$290,000||September 29, 2015||On September 29, 2015, the CFTC announced an award of $290,000 to a whistleblower. Two applicants applied for the award, but the CFTC only awarded one of the whistleblowers because the “the information provided by the second applicant did not lead to a successful enforcement . . . action.”|
|$240,000||May 20, 2014||On May 20, 2014, the CFTC announced its first-ever whistleblower award of $240,000. The then-acting director of the CFTC reported that the whistleblower provided “specific, timely and credible information” that led to a successful investigation.|
Protections Against Whistleblower Retaliation
Whistleblowers are also afforded substantial protection against retaliation. Specifically, an employer may not “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any manner discriminates against, a whistleblower” for legally reporting wrongdoing. In the event that an employer retaliates against a whistleblower, the law provides for substantial relief. This may include reinstatement, back pay, and compensation for related expenses such as litigation costs and reasonable attorneys’ fees.
A whistleblower is entitled to this protection even if they do not receive a reward. The anti-retaliation provision applies to any whistleblower who possesses “a reasonable belief that the information the whistleblower is providing relates to a possible violation of the Commodity Exchange Act (CEA), or the rules or regulations thereunder, that has occurred, is ongoing, or is about to occur.”
The CFTC can take enforcement action against an employer that “retaliates against a whistleblower by discharge, demotion, suspension, direct or indirect threats or harassment, or any other manner of discrimination” because the whistleblower provided “information to the Commission after reporting the information through internal whistleblower, legal or compliance procedures.” 17 C.F.R. 165.20(b).
If you have suffered whistleblower retaliation, call the whistleblower retaliation lawyers at our firm at 202-262-8959.
CFTC Prohibits “Gag Clauses” in Confidentiality and Employment Agreements
The rules implementing the CFTC whistleblower program prohibit employers from taking steps to impede whistleblowers from communicating with the CFTC staff. In particular, 17 C.F.R. § 165.19(b) provides:
No person may take any action to impede an individual from communicating directly with the Commission’s staff about a possible violation of the Commodity Exchange Act, including by enforcing, or threatening to enforce, a confidentiality agreement or predispute arbitration agreement with respect to such communications.
This prohibition is critical to the success of any whistleblower program because companies often use overly broad confidentiality agreements to silence and punish whistleblowers.
Experienced CFTC Whistleblower Lawyers
The whistleblower lawyers at Zuckerman Law have substantial experience representing corporate whistleblowers in whistleblower protection and whistleblower rewards cases, including matters concerning market manipulation in the oil industry.
Our team of attorneys includes a licensed Certified Public Accountant and Certified Fraud Examiner whose experience working at a large audit firm enhances the firm’s to investigate complex fraud schemes and prepare effective submissions to the CFTC. For a free, confidential consultation, click here or call us at 202-262-8959.