While we’ve written about the whistleblower programs administered by the IRS and the SEC on this blog, one has been consistently neglected – the CFTC Whistleblower Program.
The Commodities Futures Trading Commission (CFTC) regulates futures and option markets. Futures contracts are, in their basic form, agreements to purchase and sell assets at a price agreed-to today with delivery and payment at a future date. Exchanges for trading futures contracts were originally used to trade grain futures; later, people began trading futures contracts on other agricultural products and later for natural resources. Today, people trade futures in foreign currency, government securities, and stock market indices. Futures exchanges are regulated by the Commodities Exchange Act.
The CFTC Whistleblower Program
Like the SEC Whistleblower Program, the CFTC Whistleblower Program was created by the Dodd-Frank Act in 2010 and codified at 7 U.S.C. § 26. Basically speaking, a whistleblower who voluntarily provides “original information” to the CFTC that leads to the recovery of over $1 million in a judicial or administrative action is entitled to between 10 and 30 percent of the amount collected by the CFTC. The amount of the award is ultimately set by the CFTC, considering certain factors, including the significance of the information provided by the whistleblower to the success of the action; the degree of assistance provided by the whistleblower; the interest of the CFTC in deterring violations of the Commodities Exchange Act by encouraging citizens to “blow the whistle”; and potential adverse incentives from oversized awards.
“Original information” is information provided by the whistleblower from his or her own knowledge and not otherwise known to the CFTC. The information cannot be derived from an allegation made in a hearing, government report, investigation, or from the news media. The whistleblower is disqualified from receiving any award if he or she is ultimately convicted for the conduct he or she reports to the CFTC. The whistleblower must also be the “first to file,” i.e., the first person to submit the tip, in order to get an award.
To date, the CFTC has made four awards to whistleblowers, with the first made in May 2014. The awards to the whistleblowers have ranged from $50,000 to an eye-popping $10 million.
Need an Attorney for a Whistleblower Case?
If you have information about a possible violation of the Commodities Exchange Act and want to discuss whether it would be a suitable whistleblower tip, contact one of our Whisteblower Attorneys online or give us a call at 877-915-4040.
Don’t be afraid to be called a rat. You’re protected!