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The CFTC awarded approximately $6 million to an individual whistleblower. According to the CFTC, the information voluntarily provided by the whistleblower (i) was previously unknown to the CFTC, (ii) led the CFTC to open an investigation, and (iii) resulted in the successful enforcement of a covered action. CFTC Director of Enforcement James McDonald stated that whistleblowers are responsible for the CFTC obtaining a total of nearly $900 million in monetary relief.
Similar to the SEC whistleblower effort, the CFTC program awards successful whistleblowers from 10 to 30 percent of the monetary sanctions imposed by the CFTC in enforcement actions where the monetary sanction imposed exceeds $1 million. The CFTC Whistleblower Program has awarded over $110 million to whistleblowers since 2014.
Commentary Lex Urban
The CFTC is following the SEC's lead by demonstrating a firm commitment to its whistleblower program and further incentivizing insiders with evidence of potential misconduct to come forward. Four other whistleblowers provided information related to this action, but were denied awards, likely because their information did not substantially contribute to the action or was duplicative of information provided by the first whistleblower. This is another reminder that companies should ensure adequate internal reporting mechanisms for whistleblowers and implement robust policies for addressing information received through those mechanisms.
Originally published June 11, 2020.
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