CFTC Makes $4 Million Whistleblower Award
Today, (August 30), the Commodity Futures Trading Commission (CFTC) announced a $4 million whistleblower award “to an insider whistleblower who provided information that led the Division of Enforcement to open an investigation into ongoing misconduct.” This follows a relatively modest spate of awards this year, including awards on August 8 ($1M), June 17 ($8M), June 3 ($4.5M), March 14 ($1.25M).
Despite the small number of awards, the CFTC continues to trumpet the critical role of whistleblowers under the CFTC Whistleblower Program, which provides whistleblowers with up to 30% of the government’s recovery from enforcement actions they help initiate or assist. Since the Program’s inception in 2012, the CFTC has made more than $380 million in whistleblower awards from enforcement actions resulting in more than $3.2 billion in government recoveries.
In announcing the latest award, CFTC Director of Enforcement Ian McGinley highlighted the “key role” the whistleblower played “in putting a stop to the misconduct.” And CFTC Whistleblower Chief Brian Young expressed his deep appreciation of the risk whistleblowers take, noting “it is not always easy to come forward, particularly when it involves where you work or people you work with,” and his gratitude for “whistleblowers who make that difficult choice.”
As with all its whistleblower awards, the CFTC did not identify the whistleblower or the associated enforcement success, staying true to the agency’s commitment to protecting the confidentiality of its whistleblowers. The heavily redacted CFTC Order supporting the award is similarly without any identifying information. However, one notable takeaway from the Order is the indication the CFTC reduced the amount of the award because the whistleblower unreasonably delayed reporting to the agency:
Claimant’s information was highly significant to the Commission. Claimant’s information caused the Commission to open an investigation and significantly contributed to the successful outcome of the case. However, Claimant unreasonably delayed in reporting the violations of the Act to the Commission.
So words for the wise for would-be whistleblowers, if you have information of potential commodities fraud violations, it is best to report them to the CFTC at your earliest convenience. The Securities and Exchange Commission (SEC) has been equally vocal in encouraging whistleblowers to report potential violations as soon as possible under the SEC Whistleblower Program, which was evident in their two recent awards this past week—$24 million on August 26 and $98 million on August 23.
If you would like more information on the CFTC or SEC Programs, the government’s other whistleblower rewards programs, or what it means to be a whistleblower more broadly, please do not hesitate to contact us. We will connect you with an experienced member of our whistleblower team for a free and confidential consultation.