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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  November 8, 2021

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 additional context.

Prior to last month’s historic $200 million award, the CFTC’s largest award was $30 million to an individual whistleblower announced in July 2018.  In addition to eclipsing its own previous individual whistleblower award amounts, the CFTC’s landmark $200 million award exceeded those at both the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS), whose largest awards to date under their whistleblower reward programs stand at $114 million to an individual SEC whistleblower in October 2020 and $104 million to an IRS whistleblower in 2012 respectively.

While most of the CFTC’s awards to whistleblowers over the history of the program have been below $3 million, blockbuster awards like last month’s $200 million award have an important salutary effect of attracting the attention of prospective whistleblowers across the globe and serving as a real-world example of the value that the CFTC places on whistleblowers and their information.

One need only look at the widespread media attention the CFTC’s recent reward has garnered globally over the past few weeks (see, e.g., October 21 Wall Street Journal article quoting Constantine Cannon whistleblower partner Mary Inman) to know that such awards act as both a calling card for the CFTC’s whistleblower reward program and a clarion call to future whistleblowers everywhere that the CFTC’s Office of the Whistleblower is open for business and its awards offer a financial safety net to offset the real risks whistleblowers undertake by speaking up and jeopardizing their careers.  Tom Mueller, author of the 2019 book Crisis of Conscience: Whistleblowing in an Age of Fraud, dislikes our tendency to characterize rewards like the CFTC’s recent $200 million payment as bounties and says they are better described as “a net present value lump sum payment for a lost career.”  Talking Feds podcast “The Whistleblowers’ Moment” October 16, 2019 at 34:43.

As we’ve recently noted, in its 2021 Annual Report to Congress on the Whistleblower Program, the CFTC says it has received 961 new whistleblower tips in the 2021 fiscal year, which ended September 30, 2021.  In the wake of last month’s landmark $200 million reward and the attention it has brought to the CFTC’s whistleblower program, it seems safe to wager that at this time next year the CFTC will comfortably break the one thousand mark for whistleblower tips to the CFTC’s Office of the Whistleblower in its FY2022 Report to Congress.

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Tagged in: CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, International Whistleblowers, Whistleblower Rewards,