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Grassley Leads Bipartisan Effort to Shore Up CFTC Whistleblower Program

Posted  July 28, 2023

On Wednesday (July 26), Senator Chuck Grassley (R-Iowa) announced his bipartisan charge to adopt legislation to strengthen the Commodity Futures Trading Commission (CFTC) Whistleblower Program.  This is the program that both encourages and protects individuals for coming forward with information relating to potential violations of the Commodities Exchange Act and rewards them with up to 30 percent of any government recovery.

Joining Senator Grassley in this effort is Representative Zach Nunn (R-Iowa), Senator Maggie Hassan (D-New Hampshire), Senator John Boozman (R-Arkansas), Senator Raphael Warnock (D-Georgia), and Senator Susan Collins (R-Maine).  As Senator Grassley highlights in his announcement, it comes in anticipation of the Tenth Annual National Whistleblower Appreciation Day (July 30) that Senator Grassley also has spearheaded, along with his bipartisan Senate Whistleblower Protection Caucus.

The push to shore up the CFTC Whistleblower Program comes just weeks after its long-time Director Chris Ehrman left the agency for private practice.  Under his tenure, the program has grown considerably.  Last year was the program’s most successful year ever, capped by the agency’s groundbreaking $200 million whistleblower award to the Deutsche Bank whistleblower who provided the agency with critical information that led to the bank’s billion dollar plus settlement relating to charges of manipulating LIBOR.  At the time, it was the largest whistleblower reward under any government program and remains one of the highest whistleblower payouts ever.

The problem with the program is it does not have sufficient Congressional funding to reward the ever-increasing number of successful CFTC whistleblowers.  In Senator Grassley’s words, the program is “at risk of collapsing under its own success.”  Under current law, the CFTC Customer Protection Fund (CPF) — which pays out whistleblower rewards using fines collected from successful enforcement actions — is capped at $100 million.  It is not nearly enough to cover the growing number of awards along with the operating expenses and educational initiatives of the program.

Senator Grassley and his team hope their proposed CFTC Whistleblower Fund Improvement Act of 2023 will plug this gaping hole in the program.  It would raise the CPF monetary cap to $300 million and make permanent the CFTC Fund Management Act — which Congress passed in 2021 as a temporary fix — and would establish a separate account within the CPF dedicated to program operating expenses.

In announcing their proposed legislation, Senator Grassley and his colleagues were unequivocal in their support of the CFTC program, the critical role whistleblowers play in helping the government police fraud, and the urgent fix needed to maintain the growing success of the CFTC program:

  • The CFTC whistleblower program should not be a victim of its own success.  Without congressional action, the whistleblower reward fund could drain faster than it replenishes.  Our bill would ensure the CFTC whistleblower office continues to promote accountability . . . .  [Senator Grassley]
  • The CFTC relies on whistleblowers to identify fraud, and this information is absolutely critical to protecting consumers.  Right now, though, the CFTC’s whistleblower program is ironically being hamstrung because it’s been too successful.  [Representative Nunn]
  • When whistleblowers bravely step forward, they are risking their careers in order to prevent wrongdoing and save taxpayer dollars.  It is vital that this fund for whistleblowers remains available in the future to continue saving billions of dollars.  [Senator Hassan]

We applaud Senator Grassley (once again) and his bipartisan team for all the work they do in strengthening the protections and rewards afforded whistleblowers and recognizing the invaluable role whistleblowers play in making this world a better place for all of us.

If you think you might have information relating to potential fraud or misconduct in the commodities markets and would like to speak to an experienced member of the Constantine Cannon whistleblower Lawyer team, please don’t hesitate to contact us for a free and confidential consultation.

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Tagged in: CFTC Whistleblower Reward Program, Fraud in CFTC-Regulated Markets,