Congress Passes Emergency Legislation to Save CFTC Whistleblower Program
Today, the U.S. House of Representatives passed emergency legislation to fund the Commodity Futures Trading Commission (CFTC) Whistleblower Program. The bill, S-409, was previously passed unanimously by the U.S. Senate. President Biden is expected to sign the legislation into law.
“The commodities whistleblower law is fast becoming a centerpiece in combating corruption in the international markets,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Bribery is rampant in markets dealing with oil, gas, coal, timber and other natural resources. The new focus of the CFTC in tackling corruption is a landmark development in policing fraud. The strong bipartisan support for the CFTC whistleblower law is another breakthrough in the growing recognition of the critical role whistleblowers play in fighting corruption.”
“The leaders in Congress who supported this bill deserve the thanks of the whistleblower community,” added Kohn, who is also the Chairman of the Board of the National Whistleblower Center. “Senators Grassley, Collins, Stabenow, Hassan, Boozman, Baldwin, and Entz, along with Representatives Fischbach, Khanna, Scott and Thompson all showed their commitment to supporting whistleblowers who expose corruption.”
On the House floor, Representative Ro Khanna (D-CA) voiced his strong support for the bill. He stated: “This short-term solution is by no means a replacement for the much-needed comprehensive CFTC reauthorization. It will still, though, be a positive step to ensure the CFTC can accomplish an important mission, to promote the integrity, resiliency, and vibrancy of the U.S. derivative markets.”
Representative Michelle Fischbach (R-MN) also spoke in support of the bill. “I’m proud to support today’s legislation to avoid unnecessary disruptions to [the CFTC’s] activities and needless staff furloughs,” Fischback stated. “The work in these offices, particularly the whistleblower’s office, helps to root out violations of the law, which harm individuals and undermine derivatives markets. Fraud and market manipulation can steal customer funds, distort prices, disrupt orderly trading, and settlement, and zap confidence in the fairness of our markets. Whistleblowers are a critical source of information from which the Commission protects the integrity of our commodity markets.”
Kohn worked closely with Siri Nelson, the Executive Director of the National Whistleblower Center, to help ensure that this critical legislation would pass. On behalf of the National Whistleblower Center Nelson stated: ““The CFTC Whistleblower Program is critical to effective oversight of the massive commodity trading markets. Corruption in commodities trading impacts all manufacturing in the United States and directly harms consumers. The passage of the CFTC Fund Management Act demonstrates bipartisan support for whistleblowers and the importance of the CFTC program. We are grateful to the House for taking swift action for whistleblowers.”
In March of 2021, Kohn authored an article for The National Law Review explaining how the CFTC Whistleblower Program is in a financial crisis due to its success. Since 2014, the program has awarded approximately $123 million to whistleblowers and enforcement actions associated with those awards have resulted in more than $1 billion in sanctions. However, due to a cap on the fund used to finance the program, the recent growth and success of the program has depleted its funds.
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