CFTC Whistleblower Program

Selective Focus Photography of Wheat Field, representing Commodities for the CFTC and the CFTC Whistleblower Program

CFTC Whistleblower Program

The Commodity Futures Trading Commission (CFTC) was created as an independent agency of the federal government in 1974 and operates under the statutory framework of the Commodity Exchange Act of 1936. The CFTC has exclusive jurisdiction over futures trading in all commodities.

Since the creation of the CFTC, futures markets have expanded to encompass a wide array of commodities beyond the agricultural sector, including items such as gold, oil and certain financial instruments. The Commodity Exchange Act also defines “commodity” to includes “all services, rights, and interests . . . in which contracts for future delivery are presently or in the future dealt in.”

Following the financial crisis of 2008, the CFTC’s authority was expanded to include regulation of the swaps market, which involves privately traded contracts in the over-the-counter market.

The CFTC Whistleblower Program

The Commodity Futures Trading Commission’s (CFTC) Whistleblower Program was created by the Dodd-Frank Act in 2010.  The Customer Protection Fund, which provides funds for whistleblower awards, was also established by Dodd-Frank. Since the first whistleblower award was issued in 2014, the CFTC has recovered more than $3 billion and awarded over $330 million to whistleblowers.

The CFTC and SEC Whistleblower Programs operate within the same framework for the evaluation of information received from whistleblowers. Both agencies have claims review staff who issue preliminary determinations and perform initial assessments for the grant or denial of an award. Both programs also allow whistleblowers to review the record in their case and contest the denial of an award during the preliminary determination stage.

What type of information can be submitted to the CFTC?

 

The CFTC seeks “original information” that is “voluntarily submitted” involving violations of the Commodity Exchange Act.

“Original information” means information that is previously unknown to the CFTC and derived from the whistleblower’s independent knowledge or independent analysis. Independent knowledge is information possessed by the whistleblower that is not generally known or available to the public. Independent analysis means an assessment of information that may be available to the public provided that the information resulting from the evaluation of the information is not generally known.

“Voluntary submission” means that the information is provided to the Commission before a request, inquiry or demand is made to the whistleblower, the whistleblower’s legal representative or the whistleblower’s employer.

Criteria for Whistleblower Rewards

The CFTC Whistleblower Program offers rewards ranging from 10% to 30% of collected proceeds for eligible whistleblowers whose information results in a successful recovery from a “covered action.” A covered action is a judicial or administrative action brought by the CFTC in which more than $1 million in monetary sanctions is ordered.

Whistleblowers are also eligible for a monetary award if their information results in the successful enforcement of a “related action.” A related action is a judicial or administrative action brought by certain government entities that is based on information provided through the CFTC Whistleblower Program. A whistleblower can only be eligible for a reward in a related action if their information resulted in a successful resolution of a covered action brought by the Commission.

The CFTC utilizes the same factors as the SEC to determine whether a whistleblower is eligible for an increase or decrease in the award percentage.

Factors that could increase the percentage include:

    the significance of the information provided;

  • the level of assistance provided during the investigation;
  • the deterrent effects on certain types of commodities violations; and
  • the extent of the whistleblower’s participation in their company’s internal compliance process.

Conversely, the CFTC could decrease the award percentage based on factors such as:

  • the whistleblower’s role and/or extent of involvement in the misconduct;
  • unreasonable delays in reporting a violation to the CFTC; and
  • whether the whistleblower interfered with the company’s internal compliance and reporting processes.


  • One distinction between the whistleblower programs of the CFTC and SEC is the way in which awards are funded. The CFTC issues whistleblower awards from its Customer Protection Fund which is financed through monetary sanctions paid by violators. In contrast, the SEC issues awards directly from the monetary sanctions collected from the violator in an enforcement proceeding.

Protecting Anonymity

A whistleblower can submit information anonymously to the CFTC Whistleblower Program, but they must be represented by an attorney to be eligible for an award. Prior to issuing an award payment, the CFTC requires that a whistleblower verify their identity in a manner acceptable to the Commission.

The Commodity Exchange Act mandates that the CFTC protect the anonymity of a whistleblower by not disclosing information that could reveal their identity. There are, however, circumstances when the Commission can be compelled to disclose such information, such as in a judicial or administrative proceeding.

The Commodity Exchange Act authorizes the CFTC to share whistleblower information to other federal or state agencies, such as the Department of Justice, when it is deemed necessary to protect traders or further the purposes of the Act. Even when the Commission shares information in this manner, it retains its status as confidential whistleblower information.

Protections Against Employer Retaliation

Under the Dodd-Frank Act, employers are prohibited from discharging, demoting, suspending, threatening, directly or indirectly harassing, or discriminating against a whistleblower in the terms and conditions of their employment. This also includes any action that would prevent a putative whistleblower from communicating with the CFTC about a suspected violation of the Commodity Exchange Act.

Employers are also prohibited from enforcing, or threatening to enforce, a confidentiality provision in an employment agreement when it would restrict an employee from communicating with the Commission.
A whistleblower who has been subjected to wrongful retaliation can bring a private action against their employer in federal court. If successful, the remedies can potentially include reinstatement, back pay, costs of litigation, and expert witness and attorneys’ fees. The Commission is also authorized to bring an enforcement action against an employer who engages in retaliation against a whistleblower for reporting a violation to the CFTC.

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