New commodities futures trading whistleblower program offers high rewards

SECChanges to the CFTC Whistleblower Program Could Encourage More People to Come Forward

 Don’t kick yourself for not realizing The Commodity Futures Trading Commission even had its own whistleblower program.  As a new write-up in Forbes points out, the CFTC program has been a bit slow to take off, compared to the SEC whistleblower program, but that could all be changing soon. The Dodd-Frank Wall Street Reform and Protection Act, created the SEC whistleblower reward program and the CFTC whistleblower reward program in 2010.  After the financial crisis of 2007-2008 the CFTC has been transitioning to bring more transparency and stricter regulation to the multi-trillion dollar swaps market.  Now the final rules for its whistleblower program have been issued.

The Changes

 The CFTC pays rewards to whistleblowers who give information that leads to a “successful enforcement action” and more than $1 million in monetary collection.  After the money is collected, the whistleblower is awarded somewhere between 10% and 30% of the total sanctions collected.  The CFTC also offers anonymity to whistleblowers, just like the more well-known SEC program.However, earlier this year the CFTC bulked up their rules a bit.  According to Forbes, they are now able to protect whistleblowers from job retaliation. The CFTC now has the authority to take action against employers that retaliate against employees. Plus, and this one is a biggie, the employees can now sue their employers for retaliation related to whistleblowing. According to the article, the new rules also say employers can’t discourage their worker from reporting wrongdoings or potential violations to the CFTC.  This means that employment, confidentiality, or severance agreements cannot have clauses that deter whistleblowing in any way. With these new protections in place and the possibility for high monetary rewards, it no wonder the author of the Forbes article concludes the CFTC program shows promise.

Whistleblowing Reports Are Up

 The article says that the CFTC expects to pay whistleblower rewards upwards of $45.5 million this year.  That’s more than any other year of the program’s existence.  It quotes the director of the CFTC Whistleblower Office, Christopher Ehrman as saying that 2017 has been a huge year for the program.  He says whistleblower this past fiscal year jumped to 465 – a 70% increase over last year.

Game ChangerWhile the number of CFTC whistleblower reports is far below the thousands that the SEC whistleblower program receives each year, this year’s 70% jump shows it could be a game changer.  The article says that, based on the amount of whistleblower rewards the CFTC expects to award this coming year, sanctions collected provided to the SEC total at least $560 million. The article says that the whistleblower reports that the CFTC received last year involved an array of activities.  People were able to provide insider information on things like virtual currency trading, spoofing, market manipulation, false reporting, misrepresentations to customers regarding the handling of their accounts, fraud involving foreign currency exchanges, Ponzi schemes, and other off-exchange investment scams involving futures.

Jeffrey A. Newman represents whistleblowers: 1-800-682-7157