CFTC Whistleblower Program

Overview

The Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the U.S. Commodity Futures Trading Commission to pay rewards to certain individuals who provide the CFTC with information leading to a successful enforcement action. If the CFTC (or related authorities) recover at least $1,000,000 in penalties from the violators, then qualifying whistleblowers who provided the information can receive a reward from the government of up to 30% of the penalties collected.

The rules implementing the new CFTC Whistleblower Program only cover information submitted to the CTFC after July 21, 2010. However, reports of misconduct from recent years may still potentially qualify.  As long as the misconduct is recent enough that the CFTC can still prosecute the case, qualifying whistleblowers may still potentially be eligible for an award.

New Confidentiality Protections

Under the new CFTC program, whistleblowers are permitted to submit their claims anonymously.  In order to do so, however, they must be represented by counsel and follow the appropriate procedures set forth by the CFTC.  If a whistleblower qualifies for a reward, their identity must be disclosed to collect the reward, but otherwise, their identities can remain confidential.

Eligibility

The CFTC has promulgated a detailed set of guidelines regarding who can qualify for a CFTC reward.  Click here for an informal summary of the key eligibility provisions from the Final Rules adopted by the CFTC to implement the new Whistleblower Program.

Typical Violations of the Commodity Laws

The Commodity Laws cover a very broad range of activity relating to the exchange of commodities, including, but not limited to, the following: theft or misappropriation; fraudulent investment schemes (e.g., Ponzi scheme or pyramid scheme); misrepresentations or omissions relating to marketing or sales literature; inaccurate misleading or non-disclosure by commodity poll operator, commodity trading advisor, futures commission merchant, introducing broker, retail foreign exchange dealer, major swap participant, swap dealer or their associated person(s); false or material misstatements in any report or statement; off-exchange foreign currency, commodity or precious metal fraud; registration violations, including unregistered commodity pool operator, commodity trading advisor, futures commission merchant, introducing broker, retail foreign exchange dealer, swap dealer or their associated person(s); trading violations; excessive, unnecessary or unearned, commission or sales fees; unlawful sales and advisory practices; and unauthorized trading.

To discuss the potential violation about which you have knowledge, you may contact us for a confidential consultation.