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Are CFTC whistleblowers protected against retaliation?

Yes, Section 23(h)(1) of the Commodity Exchange Act prohibits retaliation by a covered employer against a whistleblower.  The whistleblower protection provision of the CEA is a critical component of the CFTC Whistleblower Reward Program, under which the CFTC issues rewards to whistleblowers who provide original information that leads to CFTC enforcement actions with total civil penalties in excess of $1 million. A whistleblower may receive an award of between 10% to 30% of the total monetary sanctions collected.

What whistleblowing is protected under the CFTC whistleblower protection law?

Section 23(h)(1) of the Commodity Exchange Act protects a whistleblower providing information to the CFTC Office of the Whistleblower or assisting in any investigation or judicial or administrative action based upon or related to the whistleblower’s tip to the CFTC.  The anti-retaliation protections apply regardless of whether the whistleblower satisfies the requirements, procedures, and conditions to qualify for a CFTC whistleblower award.

Protected whistleblowing includes reporting market manipulation, spoofing, illegal off-exchange activity, cryptocurrency fraud, manipulation of commodity benchmarks, misappropriation of investor funds, recordkeeping violations, or a registrant’s failure to supervise, insider trading failure to comply with business conduct standards.

What acts of retaliation are prohibited by the CFTC whistleblower protection law?

The CEA prohibits an employer from discharging, demoting, suspending, threatening or harassing, or in any other manner discriminating against, a whistleblower in the terms and conditions of employment because of any protected whistleblowing.

What is the burden to prevail in a CFTC whistleblower retaliation claim?

To prevail, a whistleblower must prove “but-for” causation, which is not tantamount to “sole factor” causation.  In Bostock v. Clayton Cty., the Supreme Court clarified the burden of proving “but for” causation:

Title VII’s ‘because of’ test incorporates the ‘ ‘simple’ ’ and ‘traditional’ standard of but-for causation. Nassar, 570 U. S., at 346, 360, 133 S. Ct. 2517.  That form of causation is established whenever a particular outcome would not have happened ‘but for’ the purported cause. See Gross, 557 U. S. at 176, 129 S. Ct. 2343. In other words, a but-for test directs us to change one thing at a time and see if the outcome changes.  If it does, we have found a but-for cause.

140 S. Ct. 1731, 1739 (2020).

Is there a private right of action under section 23(h)(1)(A) of the Commodity Exchange Act?

Yes, the CEA authorizes a whistleblower to bring a CFTC whistleblower retaliation claim in federal court.

What is the statute of limitations for a CFTC whistleblower retaliation claim?

Two years after the date on which the act of retaliation is committed.

What remedies or damages are available to a CFTC whistleblower?

A prevailing whistleblower can obtain reinstatement, back pay (lost wages), and compensation for any special damages sustained as a result of the discharge or discrimination, including litigation costs, expert witness fees, and reasonable attorneys’ fees.

Does the CFTC enforce the CFTC whistleblower protection law?

Yes, the CFTC can impose penalties on employers that violate the CFTC whistleblower protection law.

Can an employer require arbitration of a CFTC whistleblower retaliation?

No.  The Dodd-Frank Act expressly provides that CFTC whistleblower retaliation claims are not subject to predispute arbitration agreements.  See 7 U.S.C. § 26(n).

Do other whistleblower protection laws provide a remedy for retaliation for disclosures about commodities fraud or other violations of Section 23(h)(1) of the Commodity Exchange Act?

Yes, other federal and state whistleblower protection laws may provide an additional remedy.

To learn how to maximize your recovery in a whistleblower rewards or whistleblower retaliation matter, contact our experienced whistleblower lawyers today.

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He represents whistleblowers around the world in SEC, CFTC and IRS whistleblower claims. He is also a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor.