Bipartisan Funding Bill Offers Long-Term Fix to CFTC Whistleblower Program
On July 26, Senators Chuck Grassley (R-IA) and Maggie Hassan (D-NH) and Representative Zach Nunn (D-IA) introduced the bipartisan CFTC Whistleblower Fund Improvement Act of 2023. The bill addresses a funding crisis undermining the whistleblower award program of the Commodity Futures Trading Commission by raising the cap on the fund used to pay awards.
“This is an urgently needed fix,” says leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Fraud in commodity markets hurts every American consumer. Prices increase and fraudsters get rich.”
“The commodities whistleblower law has been remarkably successful, triggering the most successful commodity fraud investigations in history,” continues Kohn, who also serves as the Chairman of the Board of the National Whistleblower Center (NWC). “Without this reform whistleblowers will not obtain the compensation they are promised, and the ability of the CFTC to enforce the law will be crippled.”
In recent years, the CFTC Whistleblower Program has become a victim of its own success. When establishing the program in 2010, Congress created the Customer Protection Fund to pay out awards and finance the program’s operations. While the fund is entirely financed by sanctions collected in whistleblower cases, Congress placed a $100 million cap on the fund. While both the amount of sanctions collected by the program and money awarded to whistleblowers have dramatically increased in recent years, the cap on the fund has remained the same. Thus, the CFTC Whistleblower Program is in danger of running out of funds to pay large whistleblower awards and to fund its operations.
On March 8, Rostin Behnam, Chairman of the CFTC, testified before the U.S. Senate Committee on Agriculture, Nutrition, & Forestry. During his testimony, Behnam expressed his belief that the fund which finances the CFTC Whistleblower Program needs a “long-term fix.”
The CFTC Whistleblower Fund Improvement Act increases the cap on the fund to $300 million, ensuring that the program will have cash without making new authorizations or expenditures of taxpayer dollars. The Act also makes permanent the CFTC Fund Management Act, a short-term fix passed in 2021, which created a fund for the program’s operations separate from the fund for awards.
