The CFTC Whistleblower Program: Rewarding Integrity in the Commodities and Derivatives Markets

On Behalf of | January 9, 2018 | Whistleblower Law

The U.S. Commodity Futures Trading Commission (CFTC) has established a program to reward whistleblowers that report violations of the Commodities Exchange Act (CEA). The CFTC whistleblower program was created by the Dodd-Frank Act and became effective in October 2011. Under the CFTC’s burgeoning whistleblower program, whistleblowers have been rewarded with individual pay-outs as large as $10 million.

Under the CFTC whistleblower program, eligible whistleblowers are entitled to a monetary award if they voluntarily provide the CFTC with original information about violations of the CEA that leads to an agency enforcement action that results in sanctions of at least $1 million. Whistleblowers are entitled to receive between 10% to 30% of the monetary sanctions that the CFTC recovers as a result of the information provided by the whistleblower.

If the whistleblower hires a whistleblower attorney, the CFTC whistleblower program allows whistleblowers to remain completely anonymous throughout the process. This anonymity can be invaluable for industry insiders who wish to blow the whistle on wrongdoing while continuing to work in their chosen field. While the anonymity provision of the program is important, perfect anonymity can never be guaranteed in all situations. Because of that, the program provides important remedies for whistleblowers who are identified and suffer retaliation at work because of their efforts to report violations of the CEA to the CFTC. The program also prohibits employers from taking any action to impede whistleblowers from communicating with CFTC personnel about potential violations of the CEA.

As noted above, whistleblowers under the new CFTC program are entitled to a share of the recovery that results from successful enforcement against anyone who violates the CEA. The scope of conduct covered by the CEA is extremely broad and includes nearly every transaction in the commodities and derivatives markets. Some of the types of violations of the CEA that the CFTC has cracked down on in the past include:

  • Insider trading
  • Manipulation of financial benchmarks
  • Spoofing and other disruptive trade practices
  • Position limits violations
  • Failure to report swap data

Violations such as those the CFTC has cracked down on in the past and any other violation of the CEA could serve as the basis for a successful claim under the CFTC whistleblower program.

If you have information about violations of the CEA and think you may have a viable CFTC whistleblower case or a retaliation case based on your attempts to report violations of the CEA, you should contact a whistleblower attorney to discuss your situation. Sanford Heisler Sharp has experienced whistleblower attorneys that represent whistleblowers nationwide and internationally. The firm has offices in New York, Washington, DC, Nashville, San Francisco, and San Diego.