US regulatory authority awards whistleblower more than $10 million for successful enforcement action

The United States is renowned worldwide as a jurisdiction in which the customer comes first, and today’s announcement by the Commodity Futures Trading Commission (CFTC) that it has awarded more than $10 million to a whistleblower who provided key original information that led to a successful CFTC enforcement action is indeed testimony to this set […]

cftc

The United States is renowned worldwide as a jurisdiction in which the customer comes first, and today’s announcement by the Commodity Futures Trading Commission (CFTC) that it has awarded more than $10 million to a whistleblower who provided key original information that led to a successful CFTC enforcement action is indeed testimony to this set of values.

This award outstrips the previous award of $290,000 in September 2015 by quite some considerable margin.

The award is the largest made by the CFTC’s Whistleblower Program to date and the third award to a whistleblower who provided valuable information about violations of the Commodity Exchange Act (CEA).

Whilst the CFTC did not disclose the whistleblower’s identity, nor which case this relates to, this sends a clear message that those wishing to provide vital information to regulators which could result in bringing to book those who do not conduct their business with the best interests of the customer in mind that their input is valued.

By law, the CFTC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

“By providing robust financial incentives and enhanced protections to whistleblowers, the Commission incentivizes people to come forward with high quality information about serious violations of the law that we might not otherwise uncover. An award this size shows the importance that the Commission places on incentivizing future whistleblowers,” said Aitan Goelman, Director of the CFTC’s Division of Enforcement.

Christopher Ehrman, the Director of the CFTC’s Whistleblower Office, added, “The Whistleblower Program is working. My hope is that this multimillion dollar award will encourage others to come forward with information that will assist the Commission in protecting our markets.”

The CFTC’s Whistleblower Program was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The CFTC pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information about violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.

The CFTC also pays monetary awards to eligible whistleblowers whose information leads to the successful enforcement of a related action brought by another governmental entity where that action is based on original information submitted to the CFTC, and the CFTC also brings an action based on that same information.

Whistleblowers are eligible to receive between 10 percent and 30 percent of the monetary sanctions collected. All whistleblower awards are paid from the CFTC Customer Protection Fund established by Congress and financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from harmed investors to fund the program.

Under the Dodd-Frank Act, employers may not retaliate against whistleblowers for reporting violations of the CEA to the CFTC. In general, employers may not discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against a whistleblower because of any lawful act done by the whistleblower.

 

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