CFTC Whistleblower Awarded $18 Million
On October 12, the Commodity Futures Trading Commission (CFTC) issued an $18 million whistleblower award. The awarded whistleblower voluntarily provided original information to the CFTC and another agency, leading to a successful CFTC enforcement action as well as a related action by the other agency.
Through the CFTC Whistleblower Program, qualified whistleblowers are eligible to receive monetary awards of 10-30% of the funds collected in the CFTC enforcement action. The Dodd-Frank Act’s related action provisions also make CFTC whistleblowers eligible to related action awards 10-30% of the funds collected by other agencies which utilize their information.
According to the award order, the whistleblower’s disclosure was of substantial law enforcement interested because it contained information about violations which “presented a great ‘danger to market participants.’”
The CFTC further notes that the whistleblower provided “detailed information” as well as “assistance to the Division of Enforcement’s (DOE) staff that was significant in amount and quality.”
“This award appropriately rewards a whistleblower who gave valuable information during multiple contacts with DOE staff,” said Ian McGinley, Director of the Division of Enforcement. “The CFTC’s enforcement efforts benefit greatly from whistleblowers like this one, who provide and interpret key evidence and thereby conserve CFTC resources.”
“This whistleblower contributed critical information and assistance to two agencies’ investigations,” said Whistleblower Office Acting Director Christina McGlosson. “With this award, our whistleblower program continues to incentivize whistleblowers to report directly to the CFTC with actionable information.”
Established in 2010 with the passage of the Dodd-Frank Act, the CFTC Whistleblower Program has awarded approximately $365 million to whistleblowers and allowed the program to recover over $3 billion in sanctions.
While the CFTC Whistleblower Program has been remarkably successful, it is currently facing a funding crisis threatening to undermine the program. Kohn, Kohn & Colapinto founding partner Stephen M. Kohn outlined the funding crisis and the urgent need to pass the CFTC Whistleblower Fund Improvement Act in a recent article for Law360.
