The U.S. Commodity Futures Trading Commission has published a notice of proposed rulemaking in the Federal Register related to the CFTC whistleblower awards process. The proposed amendments to the regulations on first glance are pro-whistleblower and would be a welcome improvement and clarification to the program’s current regulations.
We’re about to head out for Labor Day weekend so we’ll be covering these changes more in the weeks and months to come. If memory serves, these are the first changes to the CFTC Dodd-Frank whistleblower program since they were initially set in 2011-ish. Here they are in a nutshell:
Re-interpret the Commodity Exchange Act to allow the Commission to bring an enforcement action to enforce the anti-retaliation protections for whistleblowers present in the Dodd-Frank Act. The SEC and CFTC rules currently differ on the validity of agency-enforced retaliation protections. The SEC has been successful with its interpretation of its authority and the CFTC appears to now be taking steps to align itself with the SEC rules.
Extend anti-retaliation protections to internal whistleblowers. The SEC has vigorously defended its interpretation of the Dodd-Frank Act to include internal whistleblowers (no Form TCR filing) in the judicial system. The CFTC is altering its regulations to agree with those rules.
Greater protections for whistleblowers against whistleblower unfriendly terms in employment agreements. The SEC prohibits the drafting/demanding and enforcement of contracts that interfere with whistleblower communications with the SEC program. The CFTC appears to be taking measures to duplicate the recent SEC enforcement successes against hostile employment agreements.
A new procedure for evaluating award claims similar to the SEC procedure. Although we haven’t yet reviewed the substance of all of the changes, it appears that the process for claiming a reward is getting a pretty substantial overhaul to more closely align with the current SEC process.
Give the agency discretion in the award process to waive procedural rules in extraordinary circumstances. The SEC has already waived one procedural rule in order to allow. The CFTC is going to make this authority explicit in the rules.
Extend the timeframe for filing a Form TCR to 180 days (from 120) after providing the information to another federal or state authority.
The Federal Register publication is available here. Comments must be received on or before September 29, 2016.
To speak to one of our CFTC whistleblower attorneys about the proposed changes, or to discuss a potential whistleblower tip, please call 1-800-590-4116.