- within Intellectual Property, International Law, Litigation and Mediation & Arbitration topic(s)
The CFTC awarded approximately $7 million to an individual whistleblower for information that led to a CFTC investigation, which found a violation of the Commodity Exchange Act.
In this instance, the CFTC received whistleblower applications from five claimants. The CFTC recommended that only one of the claimants receive a whistleblower award because that claimant provided voluntary, original information, while the remaining claimants did not provide any information used by the CFTC.
CFTC Director of Enforcement James McDonald explained that the "award demonstrates how integral whistleblowers have become to our enforcement efforts. Forty percent of our investigations now involve whistleblowers. We expect that number to increase as the CFTC continues to expand its whistleblower program."
The CFTC has paid out more than $90 million in awards since establishing the Whistleblower Program under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Whistleblowers may receive awards amounting to between 10 and 30 percent of the monetary sanctions imposed by the CFTC in enforcement actions where the monetary sanction imposed exceeds $1,000,000.
Commentary
This award demonstrates the CFTC's commitment to its whistleblower program, which also allows whistleblowers to bring retaliation actions against their employers in response to adverse action taken against them for reporting fraud to the CFTC or for assisting in their investigation. Perhaps most notably, the CFTC indicated that this particular whistleblower "did not provide particularly significant information" and that the charges brought were "ultimately different from [claimaint's] allegations." However, the CFTC still believed that the whistleblower was deserving of an award because the information led to an investigation being opened. This liberal interpretation of the agency's authority to grant awards will likely further encourage whistleblowers to come forward.
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