CFTC Whistleblower Protections Against Retaliation

The CFTC offers two mechanisms to protect whistleblowers submitting tips to its office: confidential filings and an anti-retaliation lawsuit.

The Young Law Group CFTC whistleblower attorneys represent individuals reporting violations of the Commodity Exchange Act and CFTC rules. Call 1-800-590-4116 for a free, confidential initial consultation.

Confidential and Anonymous Filings

Although references to whistleblower protections generally indicate the anti-retaliation provisions of the Dodd-Frank Act, the ability to keep your status as a whistleblower confidential is an important protection for whistleblowers. The Dodd-Frank Act requires the CFTC to treat submissions as confidential and not disclose information “which could reasonably be expected to reveal the identity of a whistleblower.” See 7 U.S.C § 26(h)(2). The general prohibition on disclosure of the whistleblower’s identity can only be overridden in limited circumstances. Individuals who wish to have further assurances of confidentiality can submit both their initial tip and their subsequent award claim form anonymously. Only when a whistleblower collects their award do they have to identify themselves to the CFTC. A whistleblower attorney can advise you further about maintaining your privacy while reporting derivatives fraud.

Anti-Retaliation Provisions

The Dodd-Frank Act modified the Commodity Exchange Act to offer protection to whistleblowers who suffer retaliation by their employer in connection with their whistleblower activities. Specifically, the Exchange Act now provides a federal cause of action to whistleblowers who are discharged, demoted, suspended, harassed or otherwise discriminated against by their employer because of any lawful act done in providing information to the CFTC or assisting with the investigations and enforcement actions that result. Government employees, however, must instead rely on 5 U.S.C § 1221 which provides for corrective action from the Merit Systems Protection Board in certain reprisal cases. See § 26(h)(1)(B)(i).

In 2017, the CFTC amended its rules to permit enforcement actions brought by the Commission against employers who retaliate against whistleblowers communicating with the CFTC.  The SEC interpreted the rules to provide for this authority from the beginning of its program and the CFTC amendments provided similar power to the CFTC.

The clearest manner to qualify for the private cause of action provided by Dodd-Frank whistleblower protections under the CFTC rules is to submit a Form TCR to the Commission.  The question of whether an internal whistleblower report is sufficient to qualify for the anti-retaliation protections has been extensively litigated in the context of the SEC whistleblower rules.  This matter is currently before the Supreme Court.  The CFTC rules contain different language, so internal whistleblowers may find themselves not protected even if the Supreme Court ultimately sides with the SEC interpretation.

A whistleblower is eligible for the anti-retaliation protections in Section 23(h)(1) of the Commodity Exchange Act even if they are not eligible for a reward.

Post Dodd-Frank Arbitration Agreements are Invalid.

The Dodd-Frank Act precludes the enforcement of pre- and post-dispute arbitration agreements for whistleblower retaliation claims. However, there is disagreement between courts whether the Dodd-Frank Act applies the pre-dispute arbitration bar retroactively. Some courts have allowed arbitration clauses made prior to the effective date of Dodd-Frank to apply to the anti-retaliation cause of action.

Remedies for Retaliation

The whistleblower must bring a lawsuit in an appropriate district court of the United States within two years of the retaliatory conduct. If the whistleblower is successful in the lawsuit, they are entitled to reinstatement, back pay plus interest, and compensation for special damages including litigation costs, expert witness fees and attorney’s fees.

If you fear retaliation for reporting misconduct or derivatives fraud to the CFTC, Eric L. Young and Young Law Group can advise you of your rights. Please call 1-800-590-4116 or contact us for a free case evaluation.