The CFTC whistleblower program was created in 2010 when Congress passed the Dodd-Frank Act and President Obama signed the bill into law. The program offers rewards of between 10 and 30 percent to eligible whistleblowers following enforcement actions resulting from tips leading to the recovery of more than $1 million. It is similar to the SEC whistleblower program, with a few key differences.
Our CFTC whistleblower attorneys can assist you with evaluating your options and explain more about the CFTC program. Our law firm is keenly interested in CFTC whistleblower matters. Eric Young, a partner at our firm, was one of only seven individuals and organizations to comment on the proposed change in regulations governing the CFTC whistleblower program in September 2016. He was also a speaker for the Knowledge Congress live webinar on CFTC Financial Market Reforms in 2015.
Call 1-800-590-4116 to speak to Eric Young or another CFTC whistleblower attorney at McEldrew Young in a free, confidential initial consultation.
The Pre-Tip Process
For better or worse, there is often a substantial period of time b tween the discovery of information about a suspected violation of the law and when it is reported to the U.S. Government. For certain whistleblowers like those in compliance, there are rules governing this period. For others, it takes time for them to gather the evidence and decide what to do about it. Some will decide to internally report first even though it is not required of them. For those that reach this conclusion, they may not end up consulting an attorney until after corporate inaction or retaliation.
We urge you to consult an attorney early in the process so that you don’t forfeit any rights or unnecessarily risk retaliation. Call us at 1-800-590-4116 for a free, confidential initial consultation.
The CFTC Whistleblower Submission Process
The initial tip to the CFTC must be on Form TCR. There is an online submission form but the form can also be mailed or faxed to them. We handle this process for our clients. Once the form has been submitted, the Whistleblower Office takes the tip and assigns it to the appropriate agents for investigation and enforcement. They begin to investigate the information provided. Sometimes the regulator will need to gather further information from the whistleblower during the course of its investigation. The process of investigation can be lengthy. If the tip has credibility, the agency will subpoena documents and emails from the company. Following the investigation, the CFTC will either pursue settlement talks or an enforcement action.
The Whistleblower Rewards
Dodd-Frank authorizes the CFTC to pay an award when the agency recovers at least $1 million in an enforcement action resulting from the information submitted by the individual to the government. The amount is set at between 10 and 30 percent of the recovery. The Office of the Whistleblower evaluates claims for rewards. Following a successful enforcement action, the office issues a notice providing 90 days to submit an application for a reward. The agency evaluates the action to determine whether the individual is eligible and complied with the rules of the program. If a monetary award will be made, they also consider the appropriate percentage of the reward according to the guidelines. There is a process for appeals following the determination.
There are complex rules set forth by Congress and the CFTC to determine when an individual may obtain a reward from the program. In general, the information must be voluntarily provided to the government and original (not already obtained by the government through another source). The individual providing the information may not be certain government officials or self-regulatory personnel. The individual also cannot be someone convicted of a crime in connection with the reported conduct.
There are other requirements as well. The individual must also comply with any special reporting requirements, such as the waiting period for compliance professionals. If you are considering reporting or are submitting an application for an award, we would be happy to examine the rules with regard to your specific situation.
Confidentiality and Anonymity
The identity of a whistleblower is treated as confidential information by the CFTC and protected from disclosure except in limited circumstances. Whistleblowers who decide that they need additional protection from the disclosure of their identity can report their tip anonymously. Only if they are entitled to a reward will the whistleblower need to disclose their identity to the CFTC.
Worried About Your Job?
You must file Form TCR with the CFTC before you will be ensured protections from retaliation. We can help you file and get protected. Learn more about their retaliation protections.
THE TYPES OF CASES THE CFTC IS LOOKING FOR:
The CFTC program is not like the False Claims Act. It requires the agency to prosecute the enforcement action against the company. So one of the best ways to figure out whether it is a case they will be interested in pursuing is to look at the types of actions they have pursued in the past and the misconduct they are investigating right now. Additionally, the Government is always looking for new misconduct. So don’t let the lack of a past enforcement action in your area stop you from contacting us. We will investigate your evidence and determine whether we think it is something that the CFTC would be interested in pursuing.
The CFTC is engaged in several major investigations. These investigations typically involve multiple companies in an industry and may extend for years before a decision is made to pursue an enforcement action or close the investigation. We have currently identified the following areas of investigation:
If you have evidence that will allow the CFTC to open up a new line of investigation, pursue enforcement against a different company, or materially contribute to its investigation, the U.S. Government would be interested in receiving a whistleblower tip from you.
Frequent Enforcement Actions
These are some of the enforcement actions that the CFTC brings on a regular basis:
Other activities the CFTC may be interested in include: Bitcoins, fraudulent misrepresentations, misappropriation, embezzlement, non-competitive trades, minimum capital requirements, record-keeping, customer segregated funds, and failure to supervise employees in operations or trade processing.
If you have evidence of a financial institution, trader or company engaged in a violation of the Commodity Exchange Act or the CFTC rules, please contact us for additional information about reporting it to the U.S. Government.