- May 21, 2014
- Labaton Sucharow
The Commodities Futures Trading Commission (“CFTC”) announced on Tuesday the first award paid under the CFTC Whistleblower Program launched in 2010. Like the SEC Whistleblower Program, the CFTC Whistleblower Program was created by the Dodd-Frank Act, and allows eligible individuals to receive a monetary award if they provide original information that leads to a successful CFTC enforcement action resulting in the recovery of more than $1 million in total sanctions. As in the SEC Whistleblower Program, the potential monetary award ranges from 10-30% of the total sanctions recovered in the action and any related actions.
The CFTC’s announcement is notable not only because the award is the program’s very first, but also because it underscores the CFTC’s commitment to protecting the anonymity of whistleblowers. Like the SEC Whistleblower Program, the CFTC program allows whistleblowers to report possible misconduct anonymously if they are represented by an attorney – an innovative feature that provides the best possible protection against blacklisting and other forms of retaliation. The CFTC release provided no identifying details about the whistleblower or the underlying enforcement action, except the amount of the award, helping ensure that the whistleblower’s name is not inadvertently uncovered.
The CFTC announcement also emphasizes the important contributions that whistleblowers are already making to its enforcement program. According to Acting Director of Enforcement Gretchen Lowe, “The CFTC’s Whistleblower Program is attracting high-quality tips and cooperation we might not otherwise receive and is already having an impact on the Commission’s enforcement mission.” As the types of financial activities and products regulated by the CFTC – including certain swaps, retail foreign exchange trading, energy contracts, and commodity pools – continue to become more complex, CFTC whistleblowers are likely to play an even more significant role in uncovering violations and protecting investors in the months and years ahead.
By Jordan Thomas and Vanessa De Simone
