Constantine Cannon Submits Comments on CFTC Proposed Whistleblower Rule Amendments

By the Constantine Cannon Whistleblower Team

As we previously reported, the Commodity Futures Trading Commission (CFTC) has proposed amending the CFTC Whistleblower Program and invited interested parties to weigh in on the agency’s proposed change.  Constantine Cannon took up the invitation, formally submitting its views on the proposed rule change and how to make it even better in strengthening the protections and incentives for whistleblowers to come forward.

What is the CFTC’s Proposed Whistleblower Rule Change?

Under the CFTC Whistleblower Program, individuals who provide information to the agency that leads to a successful enforcement action may receive between 10% and 30% of the Government’s recovery.  While not as successful as its companion SEC Whistleblower Program — which provides an analogous whistleblower rewards scheme — the CFTC program has still been successful in attracting whistleblowers.  The agency credits the program with leading to roughly $3.3 billion in Government recoveries and almost $400 million in whistleblower awards.

However, a major pitfall in the CFTC program has been the extended delay in the agency’s award determination process, typically taking several years to make award determinations and ultimately issue awards.  As the CFTC recognized in its Notice of Proposed Rulemaking for its proffered rule change (at 9): “The length of the lag between claim submission and award is a concern for Program participants — as well as the Commission and legislators — and could dampen incentives for potential whistleblowers to participate in the Program in the future.”[1]

The CFTC hopes to address this problem with its proposed amendment, which would create a presumption of a 30% whistleblower award (the highest end of the allowable range) where it would result in an award of $5 million or less.  According to the CFTC, the rule change would “address the whistleblower claim processing delays . . . and enhance the Program’s continued success by reinforcing whistleblowers’ incentives to participate in it.”  It would also harmonize the CFTC’s rules with the SEC rules, which already provide for such a 30% presumption under Rule 21F-6(c).

What Were Constantine Cannon’s Comments on the Proposed CFTC Whistleblower Rule Change?

Today, Constantine Cannon submitted comments on the proposed rule change, drafted by Constantine Cannon whistleblower partners Gordon Schnell and Dan Vitelli.  First off, Schnell and Vitelli applauded the CFTC for its strong support of its whistleblower program, its efforts to improve the program, and its recognition of the valuable role whistleblowers play in assisting the agency combat commodities violations.  They underscored how “in providing financial incentives and protections to whistleblowers who voluntarily report these violations, the CFTC program provides a critical path for whistleblowers to help the government.”  They further stressed how the whistleblower program (and others like it) “is an especially important tool these days given the ever-more sophisticated schemes in place and the difficulty of detecting them.”

On the CFTC’s proposed 30% award presumption, Schnell and Vitelli expressed their strong support.  Referencing Constantine Cannon’s experience under the CFTC program, Schnell and Vitelli identified the lengthy delay in the award determination process as a key pitfall in the program and one that poses a significant disincentive for would-be whistleblowers to report violations.  They know this firsthand from their years of work with whistleblowers who look to timing considerations as a significant factor in assessing whether to move forward under the whistleblower program, especially with the serious risk of retaliation so many whistleblowers face.

But while supporting the rule change generally, Schnell and Vitelli do not believe the 30% presumption will go far enough in tightening up the existing delay in making award decisions.  They point to the significant delays that still exist under the SEC Whistleblower Program even though it has used the 30% presumption for several years.  “To really accomplish the CFTC’s goal of expediting its issuance of whistleblower awards,” they say, “the CFTC should in addition to the proposed 30% presumption also adopt concrete (but reasonable) timing requirements on the CFTC’s preliminary and final award determinations.”

The concern Schnell and Vitelli express “is that even with the proposed 30% presumption, leaving the ultimate timing of a whistleblower award open-ended will continue to be a major drawback of the program and dissuade would-be whistleblowers from coming forward.”  They do not believe imposing such a timing requirement would be unduly burdensome, especially given what in their experience is the relative brevity of the preliminary and final award determinations the CFTC issues — typically just a few pages.

Schnell and Vitelli find the process under which the Department of Justice (DOJ) makes whistleblower (Relator) share determinations under the False Claims Act informative.  There, despite enforcement proceedings that can last several years, once a case is successfully resolved DOJ and the whistleblower typically reach agreement on the appropriate share within months, sometimes even weeks.  The process is much simpler too, with no formal awards application by the whistleblower, just a simple back and forth between the whistleblower (and their counsel) and the DOJ attorneys who worked on the matter.

Schnell and Vitelli hope the CFTC will give serious consideration to their comments and recommendations, which they believe will help strengthen the protections and incentives for whistleblowers and the success of the program overall.  Schnell says, “While the CFTC Whistleblower Program has worked, addressing the extended delay in the award determination process will make the program even stronger, inuring to the benefit of not just the whistleblowers, but the agency and the commodities markets it is tasked to protect.”

Click here for a copy of the formal comments Schnell and Vitelli submitted to the CFTC.

Constantine Cannon Has Substantial Experience Representing CFTC Whistleblowers

Constantine Cannon has substantial experience representing whistleblowers under the CFTC Program, the SEC Program, the False Claims Act, and the many other whistleblower rewards programs.  If you would like to learn more about any of these programs, what it means to be a whistleblower more generally, or our multiple whistleblower successes, please do not hesitate to contact us.  We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consultation.

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[1]  See https://www.govinfo.gov/content/pkg/FR-2026-06-15/pdf/2026-12006.pdf.

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