The CFTC Whistleblower Awards Eligibility, Calculation and Claims Process

How to Claim a CFTC Whistleblower Award

The CFTC posts notifications of successful enforcement actions on its website and provides them to subscribers of an email list. It does not contact whistleblowers directly to notify them of a successful action on their information. In order to claim a reward, whistleblowers must fill out Form WB-APP and submit it within 90 days of the Notice of Covered Action.

Form WB-APP consists of eight sections. Sections A and B ask for information about you and your whistleblower attorney, if you are represented. Section C asks for information about the whistleblower tip that you submitted, including the date of submission, method of submission and the Form TCR number. Sections D and E ask for information about the successful enforcement action that is the basis of your claim, including the Notice of Covered Action number, and any related actions through other agencies or organizations. Section F asks for information to determine whether you are eligible for an award. Section G provides an area for the whistleblower to submit the basis for their whistleblower award. Sections H and I requires signatures for Claimant’s Declaration and Counsel’s Certification.

Eligibility Requirements

Whistleblowers can’t qualify for a reward for their information if:

1.  they are, or acquired the information while, a member of certain government agencies or regulatory bodies.
2.  they are convicted of a criminal violation in a related action.
3.  the information was submitted previously by another whistleblower.
4.  they acquired the information from an ineligible whistleblower.
5.  they knowingly make a false statement or omit a material fact that would make their statements misleading.

What information qualifies for an award?

A voluntary submission of original information on Form TCR and subsequent information requested by the CFTC that leads to successful resolution of an action or enforcement action.

The CFTC Whistleblower program will pay a reward to eligible whistleblowers who provide original information that results in monetary sanctions of more than $1 million.

The CFTC Evaluates Claims and Determines the Reward Amount

If a whistleblower is eligible for an award, the amount will be between 10 and 30 percent. The CFTC has the discretion to set the percentage awarded within this band. In order to calculate the precise percentage of recovery, the CFTC takes into account the importance of the information provided, the degree of cooperation, the goal of encouraging whistleblowers and the potential harm from excessive awards.

If the CFTC determines that more than one whistleblower is entitled to an award from the same action or related actions, they will split the reward between whistleblowers. The total amount to the group will not fall below 10% or exceed 30% of the total recovery. See Section 165.8(b).

The CFTC has announced a handful of rewards so far. The program is only a few years old and it takes time to proceed through the process of investigation and enforcement.  According to the financial records released with the 2017 annual whistleblower report, the Whistleblower Office expects to be releasing additional awards as a result of completed enforcement actions.

A few years back, before any payments were made, we spent some time looking at the tips that had been denied.  Four reasons stood out after examining the award determinations for the reasons for denial.

1. The information was submitted prior to July 21, 2010 and is thus not original information. See Section 165.2(k)(4). If the individual submitted original information after the passage of the Dodd-Frank Act, it didn’t significantly contribute to the investigation or enforcement action.

2. The information wasn’t voluntarily submitted. See Section 165.2(o). Information can’t be provided after a request for the information is provided to the whistleblower or their employee by the CFTC or another government agency.

3. The information didn’t lead to a successful enforcement action. See Section 165.2(i). The information must lead to an examination, investigation, cause a closed enforcement action to be reopened or significantly contribute to an ongoing investigation.

4. The whistleblower didn’t file Form TCR. See Section 165.3. A whistleblower must submit a tip on Form TCR in order to be paid.

Eric L. Young and McEldrew Young Purtell Merritt’s CFTC whistleblower attorneys can help you submit a whistleblower tip to the CFTC or apply for a whistleblower award. Please call 1-800-590-4116 or contact us to receive a free case evaluation.

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