On December 19, 2019, the U.S. Commodity Futures Trading Commission (CFTC) announced that it will award more than $1 million to an individual whose tip helped expose a securities fraud scheme and eventually led to the CFTC filing charges. The individual first provided the information through the employer’s internal compliance program, which the employer submitted to another regulator, and the individual subsequently provided that information directly to the CFTC. The award is significant because it recognizes that individuals are eligible to receive an award for: (1) being the original source of information the CFTC receives from another regulator; and (2) a tip that leads to evidence of a violation the CFTC ultimately charges, even if the reported conduct itself does not form the basis for those charges.
In announcing the award, the CFTC’s Director of Enforcement James McDonald stated, “Today’s award shows how referrals from other regulators can have a meaningful impact on the Commission’s enforcement program. . . . We are committed to continuing to work with other regulators to maximize the impact and effectiveness of our enforcement and whistleblower programs.” Likewise, CFTC Whistleblower Office Director Christopher Ehrman stated, “As the specific facts and circumstances of this matter demonstrate, the whistleblower does not have to identify the exact wrongdoing the CFTC ultimately charges—it is enough for their information to lead CFTC investigators directly to evidence of one or more of the agency’s claims. Here, the whistleblower identified a problem in one area, and our Division of Enforcement used that knowledge and the whistleblower’s subsequent assistance to uncover illegality in another.”
Since issuing its first award in 2014, the CFTC has awarded approximately $100 million to whistleblowers, and the agency’s covered actions associated with those awards have resulted in sanctions totaling more than $800 million.