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CFTC Announces First Whistleblower Award




by:
Bryan B. House
Foley & Lardner LLP - Washington Office

Pamela L. Johnston
Foley & Lardner LLP - Los Angeles Office

Courtney Worcester
Foley & Lardner LLP - Boston Office

 
July 9, 2014

Previously published on July 2, 2014

On May 20, 2014, the Commodity Futures Trading Commission (“CFTC”) announced its first whistleblower award since it implemented its whistleblower program in 2011 after the passage of the Dodd-Frank Act. The whistleblower will receive $240,000. According to Gretchen Lowe, acting director of the CFTC’s Division of Enforcement, the recipient of this award provided “specific, timely and credible information that led to the Commission bringing important enforcement actions.” Press Release, Commodity Futures Trading Comm’n, CFTC Issues First Whistleblower Award (May 20, 2014), http://www.cftc.gov/PressRoom/PressReleases/pr6933-14. The identity of the whistleblower was not made public, nor was the nature of the enforcement action.

While the CFTC’s whistleblower program has received only a fraction of the attention received by the SEC’s whistleblower program, the provisions are quite similar. Under the Dodd-Frank Act, the CFTC must provide monetary awards to individuals who provide original information regarding violations of the Commodities and Exchange Act that leads to successful enforcement action. The enforcement action must result in more than $1,000,000 in sanctions, and the award may range between 10% and 30% of the sanctions collected. Like the SEC provisions, the CFTC’s whistleblower rules include anti-retaliation provisions. Unlike the SEC, however, the CFTC has not asserted that it has enforcement authority regarding the anti-retaliation provisions.

The number of whistleblower tips the CFTC has received pales in comparison to the thousands of tips the SEC has received. The CFTC received 58 whistleblower tips in fiscal 2012 and 138 tips in fiscal 2013. With the announcement of its first award, the profile of the CFTC’s whistleblower program is expected to increase.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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