It is the largest award ever made to a whistleblower on record under any of the ever-expanding list of whistleblower rewards programs. $279 million by the Securities and Exchange Commission (SEC) "to a whistleblower whose information and assistance led to the successful enforcement of SEC and related actions." That is pretty much all the SEC disclosed in announcing the award because of the agency's strong...
In 2022, the SEC and CFTC redoubled their efforts to preserve market integrity and shut down financial frauds. Both in size and composition, the agencies’ major recoveries look quite different from a year prior. 2021 was all about crypto, with four of the top ten recoveries relating to crypto offerings or exchanges. With the recent collapse of the crypto market—exposing some of the biggest frauds since the...
Safeguard Metals LLC and its principal, Jeffrey Santulan a/k/a Jeffrey Hill were hit with multiple enforcement actions this week, alleging fraud in their sale of securities and commodities to investors they targeted to sell their existing securities and invest the proceeds into gold and silver coins. The CFTC and 27 state security regulatory agencies jointly filed one action, and the SEC filed its own action. Both...
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower Programs. Seven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined. In total, the SEC paid more awards—both in total dollars and individual...
CFTC’s Largest-Ever Whistleblower Award Edges out SEC and IRS Awards and Acts as a Calling Card for the CFTC Whistleblower Reward Program Globally
Posted 11/8/21
As we’ve reported in two recent blog posts, the Commodity Futures Trading Commission’s recent award of $200 million to a whistleblower announced on October 21 is certainly the largest the CFTC has ever made, but also the largest award made under any federal whistleblower-reward program to a single whistleblower, including the False Claims Act. To appreciate the significance of this award, we wanted to give it...
CFTC Whistleblower Program 2021 Annual Report Shows Continuing Strength of Program as it Manages Challenging Year
Posted 11/1/21
The Commodity Futures Trading Commission issued its required annual report to Congress covering the CFTC Whistleblower Reward Program. The report details the successes of the program over the 2021 fiscal year. Created by the Dodd-Frank Act, the CFTC Whistleblower Program pays awards to eligible whistleblowers who voluntarily provide the Commission with original information, about matters within the CFTC’s...
SEC Chairman Views Cryptocurrency Markets as the “Wild West” and Calls for More Investor Protection
Posted 08/13/21
During a recent speech discussing the intersection of national security with cryptocurrencies at the Aspen Security Forum, Gary Gensler, the new Chairman of the Securities and Exchange Commission (SEC), made clear the SEC will use its broad powers to continue protecting investors from the volatility associated with cryptocurrency markets which he characterized as the “Wild West.” He also urged Congress to grant...
How will regulators respond to Bitcoin’s price fluctuations?
Posted 05/18/21
The price of Bitcoin—never stable—has become even more erratic in the last month. From April 17 to May 17, the price fell 26%. Such a huge drop would be noteworthy in a stock investment. But in something claiming to be a currency, that kind of instability is normally only seen in times of crisis and hyperinflation. Coming just as cryptocurrencies are making a play to be considered mainstream, this latest...
CFTC Whistleblower Program Faces Challenges of its Success: What Whistleblowers Should Know
Posted 05/11/21
In May, 2021, the Wall Street Journalreported (paywall) on “turmoil” in the CFTC Whistleblower Program. According to the article, the CFTC has under consideration a whistleblower award based on a claim by a whistleblower in the 2015 $2.5 billion Deutsche Bank LIBOR manipulation settlement. Given the size of the Deutsche Bank settlement, the potential whistleblower award is substantial: the Journal reports that...