A CFTC whistleblower is an individual who reports violations of the Commodity Exchange Act to the Commodity Futures Trading Commission (CFTC). This act regulates commodity futures and options markets in the United States, and the CFTC enforces laws to prevent fraud, manipulation, and other illegal activities in these markets.
The CFTC Whistleblower Program encourages individuals to report any misconduct related to the trading of commodities, futures, and derivatives. Examples of violations include insider trading, price manipulation, Ponzi schemes, fraudulent investment schemes, and other activities harmful to market integrity and investors.
In late August 2024, the Commodity Futures Trading Commission (CFTC) awarded over $4 million to an insider whistleblower whose information prompted the Division of Enforcement (DOE) to initiate an investigation into ongoing misconduct. The whistleblower provided crucial details about complex products and transactions central to the misconduct.
Whistleblower’s Information Played a Key Role
Director of Enforcement Ian McGinley emphasized how insider knowledge helped uncover violations that would have been challenging to detect otherwise. “The whistleblower’s information played a key role in putting a stop to the misconduct,” said McGinley. The whistleblower exposed failures to comply with certain CFTC rules designed to guard against fraudulent, deceptive, and manipulative acts. The whistleblower continued to cooperate throughout the DOE’s investigation, providing ongoing support as the case progressed.
CFTC Recognizes the Courage of Whistleblowers
Whistleblower Office Director Brian Young acknowledged the challenges whistleblowers face when coming forward, especially when it involves their workplace or colleagues. “It is not always easy to come forward, particularly when it involves where you work or people you work with. The CFTC appreciates whistleblowers who make that difficult choice,” Young said. Attorney Advisor Rachel Anderson Rynders of the CFTC’s Whistleblower Office managed this whistleblower award, ensuring that the process respected the whistleblower’s confidentiality and provided due recognition.
CFTC’s Whistleblower Program Offers Incentives
The CFTC’s Whistleblower Program, created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, offers monetary incentives to individuals who report violations of the Commodity Exchange Act (CEA). Since 2014, the program has awarded more than $380 million to whistleblowers. These awards relate to enforcement actions that have resulted in monetary sanctions exceeding $3.2 billion. The CFTC also grants awards for actions brought by other domestic or foreign regulators, provided certain conditions are met.
CFTC Protects Whistleblowers’ Confidentiality
The Commodity Exchange Act provides strong confidentiality protections for whistleblowers. The CFTC does not disclose any information that could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances. The CFTC also keeps the specific enforcement action and the exact dollar amount of the award confidential.
Whistleblower Awards Funded by the Customer Protection Fund
Whistleblowers can receive between 10 and 30 percent of the monetary sanctions collected in a case. The CFTC funds all awards through its Customer Protection Fund, which is financed entirely by monetary sanctions paid by violators of the CEA. The program does not use any money from injured customers. If you believe you have information about fraud or questions about the CFTC’s Whistleblower Program, please contact Hoyer Law Group for a consultation with an experienced attorney.
