CFTC Whistleblower Program Sees Huge Increase in Tips and Awards

According to a report released on November 2, 2020, the Commodities Futures Trading Commission (“CFTC” or “Commission”) saw a 126% increase in whistleblower tips during 2020. The Commission issued 11 final orders granting 16 whistleblowers awards in 2020, more than doubling the total awards given during 2019. The CFTC whistleblower reward program was established by the 2010 Dodd Frank Act to protect the U.S. economy and the American public. The program pays monetary awards to qui tam whistleblowers who provide information that leads the CFTC to bring a successful enforcement action exceeding a million dollars for violations of the Commodity Exchange Act.

In its annual report to Congress for FY 2020, the Commission detailed the whistleblower program’s success, noting it granted 16 applications for whistleblower awards, totaling approximately $20 million. These awards were paid to individuals who voluntarily provided original information or analyses that led to successful enforcement actions. There were eleven Final Orders granting those awards, including three orders involving multiple whistleblower awardees. Of these awards, two were given to whistleblowers located outside the United States. One award was based in part on related actions brought by another regulator.

Since the inception of the Whistleblower Program, the CFTC has issued 25 orders granting a total of more than $120 million in awards. The Commission actions associated with those awards have resulted in sanctions orders totaling nearly $1 billion.

In 2020, the CFTC received 1,030 whistleblower tips. This record-high represents an increase of 126% over the 455 Forms TCR received in 2019. This is 36% over the previous highwater mark of 760 in 2018. The tips reported “activities such as failures to supervise; record keeping or registration violations; swap dealer business conduct; wash trading; solicitation, misappropriation, and other types of fraud; use of deceptive or manipulative devices in trading; as well as spoofing and other forms of disruptive trading or market manipulation.”

Below is a list of the whistleblower awards made by the Commission during FY2020.

• October 24, 2019 – Award to Whistleblower Who Provided Substantial But Incomplete Assistance
• December 19, 2019 – Award of Approximately $1 Million to Whistleblower Who Was Original Source
• April 20, 2020 – Award to Whistleblower Who Provided Crucial Information
• May 1, 2020 – Award of More Than $2 Million Shared Among Four Whistleblowers
• June 5, 2020 – Award of More Than $6 Million to Whistleblower
• June 12, 2020 – Award to Whistleblower Whose Information Led to a Successful Enforcement Action
• July 20, 2020 – Award of More Than $1 Million Split by Two Whistleblowers
• July 24, 2020 – Award of More Than $9 Million to Whistleblower
• August 28, 2020 – Award to Whistleblower for Exposing Ongoing Fraud
• September 4, 2020 – Award Split by Two Whistleblowers, One Domestic, One International
• September 28, 2020 – Award of About $250,000 to Whistleblower Who Assisted but Delayed Reporting

The report also mentions that the CFTC also received an additional 191 separate non-whistleblower tips and complaints, mostly via email. These tips came from individuals who did not use the “Tip, Complaint, or Referral” form. This form is required to qualify for a whistleblower award. The Commission notes that “When appropriate, the WBO communicates with non-whistleblower correspondents and invites them to become whistleblowers by submitting a Form TCR.” Whistleblowers should seek the counsel of experienced SEC whistleblower attorneys to assist them in the process of submitting a TCR form. This will ensure they take the proper steps to remain anonymous and qualify for a whistleblower award