CFTC Report Highlights Whistleblowers Tips to Other Regulators Qualify for Awards

The excessive variety of whistleblower ideas demonstrates the effectiveness of the CFTC program.

The Commodities Futures Buying and selling Fee (“CFTC” or “Commission”) submitted its annual report to Congress on October 29, 2021. Within the 2021 fiscal 12 months, the CFTC issued 65 closing orders addressing 74 whistleblower functions, of which 6 had been granted awarding multiple whistleblowers.  These awards had been paid to people who voluntarily offered authentic data or analyses to profitable enforcement actions.

The report didn’t present a lot details about the whistleblower awards it granted in FY2021. Nonetheless, it did notice that 4 awards had been to whistleblowers who first offered different authorities with data. Whistleblowers who first report violations to one other regulatory company, just like the Securities and Trade Fee or the Nationwide Futures Affiliation, can qualify for an award from the CFTC. These whistleblowers should later file a TCR with the CFTC to set up their standing as CFTC whistleblowers. Every of those whistleblowers “provided critical evidence that the Division of Enforcement used in its investigation and/or subsequent litigation against the wrongdoers.” The opposite two awards went to whistleblowers who offered data that was particular, credible, and well timed. One additionally offered vital and ongoing help within the investigation.

The report states that for the reason that inception of the Whistleblower Program, the CFTC has issued 31 orders granting a complete of greater than $123 million in awards. The entire sanctions ordered in CFTC actions related to these awards exceeded the $1 billion degree in 2021. After FY2021 ended on September 30, 2021, the CFTC issued a record $200 million whistleblower award.

The CFTC continued to obtain a excessive variety of whistleblower ideas in 2021. The variety of ideas was down barely from final 12 months at 961, however considerably larger than the years prior to 2020. Within the 2020 Report, the Fee famous a 126% enhance from the earlier 12 months with a report of 1030 ideas. The Fee additionally obtained 189 dietary supplements from whistleblowers to beforehand submitted TCRs.

In accordance to the CFTC, it obtained ideas and complaints relating to “insider trading, position limit violations, reporting violations, false statements to the government, failure to supervise, recordkeeping violations, registration violations, illegal swap dealer business conduct, wash trading, solicitation fraud, misappropriation, various other types of fraud, use of deceptive or manipulative devices in trading, spoofing, and other forms of disruptive trading or market manipulation.”

The report additionally states the CFTC additionally obtained 159 separate non-whistleblower ideas and complaints, largely by way of e mail. The following pointers got here from people who didn’t use the “Tip, Complaint, or Referral” kind. This way is required to qualify for a whistleblower award. Whistleblowers ought to search the counsel of skilled SEC whistleblower attorneys to help them within the strategy of submitting a TCR kind. This can guarantee they take the correct steps to stay nameless and qualify for a whistleblower award. 

The CFTC whistleblower reward program was established by the 2010 Dodd-Frank Act to defend the U.S. financial system and the American public. This system pays financial awards to qui tam whistleblowers who present data that leads the CFTC to carry a profitable enforcement motion exceeding a million {dollars} for violations of the Commodity Trade Act.

CFTC Annual Report to Congress for FY 2021

Geoff Schweller additionally contributed to this text.

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