The CFTC Whistleblower Program covers reports of violations of the CEA, including market manipulation, insider trading, corruption, recordkeeping or registration violations, and fraud or manipulation related to digital/crypto assets, precious metals, and forex trading.
For the purposes of the Program, a whistleblower is someone who voluntarily provides the agency with original information in writing about a violation of federal securities law that has happened, is ongoing, or is about to occur. Whistleblowers have original information when their tip is based on independent knowledge or analysis that comes from sources that are not publicly available (like news media or public disclosures). The agency considers information voluntary when the whistleblower has made the report on their own, before any inquiry or investigation has requested it.
Whistleblowers who submit information that leads to an enforcement action that results in sanctions of over $1 million can be eligible for an award of 10-30% of the penalties.
To be eligible for an award under the Whistleblower Program, individuals must submit their report through the agency’s Tips, Complaints and Referrals (TCR) process. A whistleblower can be anyone with original information, such as an employee, trader, or fraud victim, and can remain anonymous through the reporting process. While tips cannot be made by a company or organization, they can be submitted by more than one person. The Program is open to non-U.S. citizens, and reports can relate to conduct outside the U.S., if the violations impact the American commodities market.
While many whistleblowers report internally to their employer first, whether an internal report was made generally has no impact on a whistleblower’s eligibility for the Reward Program. There are some specific rules related to reporting for compliance personnel, and if you have any questions, it’s important to make sure you talk to an attorney to ensure you’re preserving your rights.
Once a tip is submitted, the CFTC makes an assessment and determines whether to open a new investigation or use the information in any ongoing investigations. Even where an investigation is already underway, a whistleblower tip may still be eligible for an award if it was provided outside of any inquiry or request, qualifies as original information, and substantially contributes to the inquiry.
Throughout the reporting and enforcement process, important anti-retaliation protections apply under the CEA and other statutes, to ensure that whistleblowers are not punished for coming forward. Companies cannot demote, discharge, suspend, harass, or discriminate in any way against an employee who has reported conduct to the CFTC that they reasonably believe is a violation of federal commodities law. It is also illegal for any person to interfere with someone making a direct report of alleged wrongdoing to the agency.
Unlawful retaliation is subject to separate legal claims and damage awards, independent of any violations of commodities law.
These descriptions of the False Claims Act are general in nature and do not constitute legal advice. Fraud schemes targeting federal dollars are complex and ever-evolving. The attorneys at Whistleblower Partners understand how the detailed legal requirements of the False Claims Act relate to these elaborate scams and are happy to discuss any potential matter further.
If you would like more information or would like to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.
