First Whistleblower Award Issued by CFTC

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The Commodity Futures Trading Commission announced today that they are making a payment of approximately $240,000 to a whistleblower for information under the authority granted to it by the Dodd-Frank Act. It is the first award by the CFTC Whistleblower Program.

Additional details about the case and the individual paid were not released. They are committed to protecting the identity of people submitting tips and treat information as non-public and confidential, so we don’t expect to hear more about the specific case from them. Sometimes, based on the timing of announcements, it is possible to speculate about the underlying enforcement action. The CFTC probably collected between $800,000 and $2.4 million because of the tip.

The CFTC program receives tips about violations of its regulations and the Commodity Exchange Act. It had rejected approximately 25 applications for awards through the end of 2013. Their press release about the payment can be found here.

The CFTC receives fewer tips than the other programs. It received 138 submissions of Form TCR in Fiscal Year 2013 compared to the approximately 3,000 tips received by the Securities and Exchange Commission.

The SEC paid its first award to a whistleblower in August 2012. The initial payment was for $50,000. In April, they announced payment of an additional $150,000 to the individual after collecting additional funds from one of the defendants in the case. The follow up award represented 30 percent of the $500,000 collected, the maximum the agency is allowed to pay.

The first mandatory award under 26 U.S.C. § 7623(b) by the Internal Revenue Service program went to a Young Law Group (predecessor to McEldrew Young) client of Eric Young in 2012. The client was awarded $4.5 million by the IRS.

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