The U.S. Commodity Futures Trading Commission awarded more than $10 million to a whistleblower last week who provided key original information that led to a successful CFTC enforcement action.
The award was only the third under the CFTC’s whistleblower program and the biggest by far.
The CFTC made its first award to a whistleblower in May 2014, paying out $240,000.
In September 2015, the agency announced its second award of about $290,000.
The CFTC said in its latest annual report to the Senate it denied awards to 25 whistleblower award applicants.
The CFTC’s whistleblower program was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The program rewards people who voluntarily report violations of the Commodity Exchange Act if the information leads to a successful CFTC enforcement action resulting in sanctions of more than $1 million.
The whistlblower in last week’s award wasn’t identified.
By law, the CFTC protects the confidentiality of whistleblowers and doesn’t disclose information that might directly or indirectly reveal a whistleblower’s identity, the CFTC said.
The CFTC is an independent federal agency. It regulates the U.S. derivatives markets, including futures, options, and swaps. Its enforcement division investigates violations of the Commodity Exchange Act and the CFTC Regulations, such as fraud, market manipulation, and illegal trade practices.
The CFTC launched a new whistleblower website this year at www.whistleblower.gov.
Christopher Ehrman, director of the CFTC’s Whistleblower Office, said last week: “The Whistleblower Program is working. My hope is that this multimillion dollar award will encourage others to come forward with information that will assist the [CFTC] in protecting our markets.”
Whistleblowers are eligible to receive between 10 percent and 30 percent of the money collected by the CFTC in an enforcement action and by other agencies in related cases.
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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
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