CFTC Whistleblowers

What is the CFTC Whistleblower Program?

The CFTC Whistleblowers program allows employees to report fraud, abuse, corruption, and criminal activity within the financial industry without fear of retaliation.

The Dodd-Frank Act created the Commission's whistleblower program. It provides monetary awards to persons who voluntarily report violations of the Commodity Exchange Act (CEA) if the information leads the Commission to bring an action, or if the information significantly contributes to the success of a Commission action that results in more than $1 million in monetary sanctions. The Commission can also pay awards based on economic sanctions collected by other authorities in activities related to a successful CFTC action and based on information provided by a CFTC whistleblower. 

The CFTC has the authority to enforce the anti-retaliation provisions against offending employers under the CEA. The Dodd-Frank whistleblower provisions also prohibit any action taken to impede an individual from communicating directly with the Commission's staff about a possible violation of the CEA, as well as retaliation by employers against employees who come forward with information about potential violations. The Dodd-Frank whistleblower provisions also include certain confidentiality protections to whistleblowers.

History of the CFTC Whistleblower Program

The CFTC‘s Whistleblower Office administers the program. It provides information to whistleblowers regarding the process of filing a complaint and the potential financial reward available to them. The office also handles inquiries from the public and media.

In July 2010, in response to the 2008 financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, known colloquially as “Dodd-Frank.” One of the essential components of this broad overhaul of the U.S. financial regulatory system was the enactment of the CFTC Whistleblower Program.

The CFTC Whistleblower Program Process

To qualify for an award, whistleblowers must provide information that leads to an enforcement action resulting in a monetary sanction against a company or individual. They must show that they had direct and independent knowledge of wrongdoing at the targeted entity.

If counsel represents a whistleblower, the TCR form need not disclose the whistleblower's identity. The whistleblower can proceed anonymously to contact the CFTC through the CFTC whistleblower's attorney. However, the CFTC cautions that the whistleblower's identity may become public when announcing settlements and making awards.

Unlike the FCA, the whistleblower does not have any right to participate as a party in any enforcement action brought by the CFTC against the defendant. If the CFTC chooses not to pursue an enforcement action, the CFTC Whistleblower Program does not provide a means for the whistleblower to pursue such action independently.

Key Features of the CFTC Whistleblower Program

The CFTC‘s whistleblower program offers employees who believe they may have information regarding violations of federal commodities laws the opportunity to come forward and receive financial rewards. To qualify for an award, whistleblowers must provide the CFTC with original documents or records that substantiate their claims. 

The CFTC will then determine whether the information provided constitutes a violation of law or regulation. If so, the CFTC will issue an award letter describing the action taken against the violator and the award amount. The CFTC will also inform the public of any enforcement action against a company or individual.

How does the CFTC Whistleblower Program differ from the Securities and Exchange Commission SEC?

The CFTC‘s whistleblower program differs from the SEC’s in several ways. For example, the CFTC’s whistleblower program is available to employees who provide information regarding any violation of federal securities law. In contrast, the SEC’s whistleblower program applies only to violations of the federal securities laws. In addition, the CFTC‘s program provides greater protections for whistleblowers than the SEC’s program.

Elements of a Claim under the CFTC Whistleblower Program

A claim must meet all of the following elements: (1) the claimant is a source; (2) the information provided is “substantial”; (3) the information is timely; (4) the information is credible; (5) the information is reliable; and (6) the information provides direct and independent evidence of fraud.

The CFTC Whistleblower Reward

The CFTC Whistleblower Program provides financial incentives to individuals who provide information leading to successful enforcement actions against market participants. In addition to monetary rewards, whistleblowers may qualify for an additional payment from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) based on the severity of the violations. Award amounts vary depending upon the type of violation committed and the degree of culpability.

International Whistleblowers and the CFTC

In addition to the U.S., the CFTC has jurisdiction over securities fraud cases involving foreign entities and individuals located outside the United States. Foreign whistleblowers may file complaints directly with the CFTC without intermediary.

FAQs

• What does it mean to “blow the whistle” on wrongdoing?

Whistleblowing refers to disclosing illegal activity to authorities. It involves coming forward voluntarily with information about unlawful conduct. A person who blows the whistle is often called a “whistleblower.”

• Who can be a whistleblower?

Anyone can blow the whistle on wrongdoing, regardless of race, gender, age, religion, sexual orientation, disability, national origin, citizenship status, or political affiliation.

• What types of activities constitute whistleblowing?

Any act that violates federal law is considered whistleblowing because it exposes illegal activity. Examples include violating securities laws, national health care programs, environmental regulations, immigration laws, and tax laws.

Do You Have A CFTC Whistleblower Violation to Report? 

Our whistleblower lawyers can represent your CFTC Whistleblower case. For more information, you can contact The Whistleblower Advocates at (833) 310-3147 for a FREE, confidential consultation.