Today, the Commodity Futures Trading Commission (CFTC) announced a $30 million whistleblower award-the largest ever under the CFTC’s Whistleblower Program. The award, which is nearly triple the size of the CFTC’s previous highest award, is the fifth made under the program since its inception in 2010 and the first under President Trump. In February, Bloomberg reported that a whistleblower would receive a $30 million award from the CFTC for reporting JPMorgan Chase & Co.’s failure to disclose that it was directing certain wealthy clients into investments that would be profitable for the bank.
Although the CFTC does not identify whistleblowers when announcing awards, Edward “Ted” Siedle, a former Securities and Exchange Commission (SEC) lawyer specializing in the investment-management industry, has identified himself as the whistleblower in this matter. Mr. Siedle will also receive an award from the SEC for reporting JPMorgan’s violations.
The CFTC order granting the award highlights the immense and inimitable value that whistleblowers bring to government investigations. In the order, the CFTC notes that whistleblower delivered “specific, timely, and credible” information that tipped off the CFTC to the violations at issue. The whistleblower provided not only this “essential” information but also “ongoing, extensive, and timely assistance” throughout the investigation, which significantly conserved agency resources.
The CFTC Whistleblower Program was created under the authority of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The program is designed to encourage individuals to submit information regarding commodities laws violations to the CFTC. Under the Commodity Exchange Act, the CFTC regulates the trading of futures, options, and swaps on “commodities,” which are traditionally thought of as tangible goods such as wheat or oil. The CFTC has also asserted authority over various financial instruments and benchmarks, including virtual currency, London Interbank Offered Rates (LIBOR), and foreign exchange (forex) benchmarks.
If the whistleblower’s information leads to a CFTC enforcement action resulting in over $1 million in monetary sanctions, the whistleblower can receive an award of between 10 and 30 percent of the money collected. Whistleblowers may also be entitled to awards based on monetary sanctions collected by other agencies in actions related to a CFTC enforcement action.
In today’s announcement, Aitan Goelman, Director of the CFTC’s Division of Enforcement, emphasized that the CFTC hopes this record award will encourage other whistleblowers to come forward: “By providing robust financial incentives and enhanced protections to whistleblowers, the Commission incentivizes people to come forward with high quality information about serious violations of the law that we might not otherwise uncover. An award this size shows the importance that the Commission places on incentivizing future whistleblowers.”
To find out more about whether you should submit information through CFTC Whistleblower Program, contact us today.
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