The Bipartisan Budget Act of 2018, passed overnight and signed this morning by President Trump to end the second federal government shutdown of this year, includes two key provisions for whistleblowers previously introduced by Senator Charles Grassley but removed from the January budget deal.
The CFTC announced enforcement actions against three banks and six individuals for spoofing at the end of January. The three banks, Deutsche Bank, UBS, and HSBC, were charged with spoofing in precious metals futures contracts trading on the Commodity Exchange, Inc. (COMEX).
Cryptocurrency, led by bitcoin, has become a hot topic in the mainstream media recently. Both the CME and Nasdaq have announced plans to introduce trading in bitcoin futures. And the investing community continues to be split between those who believe it is the future of currency and those who believe it is a bubble or, worse, a fraud, as Jamie Dimon called it in September.
The CFTC has also issued its annual report to Congress on the Dodd-Frank Act whistleblower program during Fiscal Year 2017. The CFTC did not issue any whistleblower awards last year. However, it did amend the whistleblower rules and regulations through a period of public notice and comment rulemaking.
Senator Grassley has proposed 15 amendments to the Senate bill for the Tax Cuts and Jobs Act. Two of those amendments are important to whistleblowers, so we are going to examine them in more detail here.
We are approaching the end of the U.S. Government’s 2017 fiscal year on September 30th. We haven’t written too much about the CFTC whistleblower program this year because there have only been a handful of newsworthy events in the enforcement of the Commodity Exchange Act. However, after reading the news stories this week concerning the CFTC’s push for self-reporting of financial wrongdoing, we realized that there hasn’t been a single award determination yet in the first nine months of the calendar year. We thought it worth taking a look back at the CFTC Whistleblower program and what has happened over the past twelve months.
The CFTC’s Director of Enforcement unveiled a new program this week to promote self-reporting of violations of the Commodity Exchange Act or CFTC Rules in the financial industry. According to James McDonald, it will provide a significantly reduced penalty for companies and individuals that self-report and fully cooperate with the CFTC.
The Commodity Futures Trading Commission (CFTC) has filed an enforcement action against one of the largest precious metals fraud cases in its history. In light of that action, we thought it important to remind victims and industry professionals about the CFTC whistleblower program, which offers rewards for nonpublic information about violations of the Commodity Exchange Act.
In January, the CFTC settled its first civil enforcement action against a bank for spoofing when Citigroup agreed to pay a $25 million fine for sending orders into the U.S. Treasury futures market with the intent of canceling them. Now, the CFTC has entered into its first non-prosecution agreements ever, making deals with three traders who engaged in wrongful conduct but served as cooperating witnesses in that case.
A media outlet, Financial Planning, is predicting that a pair of SEC whistleblowers will share an award of approximately $70.6 million out of the $307 million in regulatory fines against JPMorgan in 2015. Another outlet, Advisor Hub, put the number at $61 million instead. Either award amount would be the largest in the history of the SEC whistleblower program to date.