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CFTC plans to expand whistleblower awards and protections

The U.S. Commodity Futures Trading Commission is asking for public comments about proposed amendments to the agency’s whistleblower rules.

The amendments would give the agency the power to act against employers that retaliate against whistleblower. Payouts could also grow under the new rules.

The CFTC’s whistleblower program started operating in 2011. It was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

So far the agency has made four whistleblower awards.  

The biggest was in April this year when the CFTC awarded a whistleblower more than $10 million. Other awards were $240,000 in 2014, $290,000 in 2015, and about $50,000 last month.

The CFTC said in its latest annual report it denied awards to 25 whistleblower award applicants.

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.

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 proposed amendments will extend the time when a whistleblower must file a claim request from 120 days to 180 days.

The changes would create a cliams review process more like the SEC, with a specialized staff and the whistleblower office handling the process, instead of the current Awards Determination Panel.

  • The Whistleblower Office would have discretion to determine ineligible claims.
  • The Whistleblower Office could require additional information, explanation, or assistance from a claimant.
  • The amendments would allow claimants to ask reasons for award denials and submit objections.
  • And whistleblowers could receive awards based not only on CFTC enforcement actions but also related enforcement actions by other agencies.

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.

Comments about the proposed amendments must be submitted by September 29, 2016. The CFTC’s Comments Online Process is here.

The proposed amendments are here (pdf).

The CFTC will published the comments on its website.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.

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