The CFTC has issued final rules based on its previously proposed changes to the CFTC whistleblower program. The changes have left the core of the program intact while strengthening the whistleblower retaliation protections, harmonizing the rules with the SEC program and adding transparency to the process for reward claims.
McEldrew Young was one of two law firms to comment on the proposed changes. We appreciate the government’s efforts to improve the program and welcome the changes which we believe are on balance positive for whistleblowers.
The changes include:
Sharing of Information
The rules now provide for the CFTC to share information to specified organization and requires those organizations to maintain the confidentiality of the whistleblower in accordance with section 23(h)(2)(A) of the Commodity Exchange Act.
The Commission has recognized its ability to bring an enforcement action against a company that has engaged in whistleblower retaliation. It also recognized that the anti-retaliation protections can extend to at least some internal whistleblowers prior to the filing of a Form TCR. It further prohibits any person from impeding communications between the CFTC and whistleblowers.
These changes move the CFTC program closer to the rules followed by the SEC program. Previously, the CFTC rules required the submission of a Form TCR to begin the Dodd-Frank anti-retaliation protections and did not permit agency enforcement actions.
The CFTC extended the deadline by 60 days to become an original source after submitting information internally to a corporation or to another government agency or specified organization. Whistleblowers now have 180 days to submit the information to the CFTC in order to have the CFTC apply the date of the initial submission to its submission.
Waivers – The Commission clarified that any procedural requirement may be waived upon a showing of extraordinary circumstances.
Related Actions – The Commission is not going to track, monitor or report on related actions. It is now the responsibility of the whistleblower and their counsel to track related actions.
Procedural – A few different changes have been adopted here, including a streamlined process for facially ineligible award claims and a new process for claims reviews.
This is just a summary of the rule changes. We encourage all interested parties to read the rules in full as well as the CFTC commentary justifying the changes. The new rules were adopted unanimously. The rules will go into effect sixty days after publication in the Federal Register.