CFTC hands out $18 million to tipster, payouts top $365 million

abdelaziz Fathi

The US Commodity Futures Trading Commission awarded $18 million to a whistleblower for his pivotal role in a CFTC enforcement action and a concurrent investigation by another agency.

According to the agency’s order, one whistleblower received the regulatory bounty for information and assistance that led the staff to open the investigation into “hard-to-detect violations.” His contribution was not just extensive in its scope but also of high quality, ensuring a rigorous and comprehensive enforcement action.

He was the initial source that alerted the CFTC to a previously unknown conduct and thereafter provided assistance that helped advance investigations. Specifically, he gave useful information at the earliest stages of the investigation and later provided supplemental information.

Furthermore, the whistleblower’s collaboration with the second, unnamed agency proved instrumental in another related action, playing a significant role in its eventual conclusion.

“This award appropriately rewards a whistleblower who gave valuable information during multiple contacts with DOE staff,” said Ian McGinley, Director of the Division of Enforcement. “The CFTC’s enforcement efforts benefit greatly from whistleblowers like this one, who provide and interpret key evidence and thereby conserve CFTC resources.”

“This whistleblower contributed critical information and assistance to two agencies’ investigations,” said Whistleblower Office Acting Director Christina McGlosson. “With this award, our whistleblower program continues to incentivize whistleblowers to report directly to the CFTC with actionable information.”

The US regulators consider several factors in determining the size of whistleblower awards. As long as their internal disclosure prompted a company investigation, they can benefit from all the information discovered in that investigation. The whistleblower could even get a higher bounty as he submitted a payout claim in connection with a third related action by a state regulator.

Committed to protecting the anonymity of informants, neither the tipster nor the firm accused of misconduct were identified by the regulatory agency.

Earlier this year, the Securities and Exchange Commission (SEC) paid a record $279 million to an anonymous whistleblower who provided “critical and timely” information that led to a successful enforcement action against a company that violated securities laws.

The payout was the largest ever made by the SEC under its whistleblower program, which was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The program offers monetary incentives to individuals who report possible violations of securities laws to the SEC, and whose information leads to successful enforcement actions.

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