The Commodity Futures Trading Commission Monday granted an “enhanced” award of $1.5 million to a whistleblower who tried to report the problem internally before contacting the CFTC.
The whistleblower provided original information that helped the agency understand a “complex scheme” and interview witnesses about it, the CFTC said.
The whistleblower “attempted to report his/her concerns internally” before reporting the scheme to the government, the CFTC’s redacted award order (pdf) said.
“While there is no requirement that a whistleblower report internally before approaching the Commission, today’s award demonstrates that the Commission may pay enhanced awards to those that do — that is one of the positive factors set out in our rules for the Commission to consider in making its award determination,” Christopher Ehrman, the director of CFTC’s Whistleblower Office, said.
The CFTC denied award applications submitted by four other claimants. Their information was “not useful” to the CFTC’s investigation and didn’t lead to the successful enforcement action, the agency’s order said.
The successful whistleblower also received an award from another federal agency, the CFTC said.
By law, the CFTC protects the confidentiality of whistleblowers and doesn’t disclose information that might directly or indirectly reveal a whistleblower’s identity.
The program rewards people who voluntarily report violations of the Commodity Exchange Act if the information leads to a successful CFTC enforcement action resulting in sanctions of more than $1 million.
Since issuing its first award in 2014 the CFTC has awarded more than $85 million to whistleblowers.
The CFTC regulates the U.S. derivatives markets, including futures, options, and swaps. Its enforcement division investigates violations of the Commodity Exchange Act and the CFTC Regulations, such as fraud, market manipulation, and illegal trade practices.
The FCPA Blog | May 6, 2019