December 6, 2024
Earlier this fall, the Commodity Futures Trading Commission (CFTC) issued its annual Whistleblower Program report to Congress. The CFTC reported record breaking awards, reflecting an increase in whistleblower reports, and actions stemming directly from CFTC whistleblowers. Some highlights from the report:
- In FY 2024, the CFTC received a record 1,744 whistleblower tips and 317 award applications; the number of tips represented an increase of 14% above 2023, which had previously been the highest in CFTC history.
- A significant 42% of the CFTC’s enforcement matters involve whistleblowers, underscoring their vital role in the Division of Enforcement’s effectiveness.
- The CFTC awarded over $42 million in whistleblower awards, having awarded a record-breaking 12 whistleblower awards, including the CFTC’s first-ever award to a compliance officer. Another award recipient was a market participant who reported observations specific enough to lead to an enforcement action, resulting in a $4.5 million award.
- The CFTC ordered an entity to pay $55 million for fraud, manipulation, and impeding whistleblower communications with the CFTC. This matter represents the first time the CFTC has charged an entity for using agreements that impede whistleblowing.
- Since its inception in 2014, the CFTC has issued 53 orders granting awards totaling $390 million in whistleblower payments. Related enforcement actions to date have resulted in more than $3.2 billion in sanctions.
- Cryptocurrency schemes, romance scams, and banking fraud are three of the top trends driving CFTC enforcement actions. In its budget proposal, the CFTC requested approximately $210 million for anticipated whistleblower award payouts.
Notable Whistleblower Award
CFTC awards whistleblower over $18 million: The CFTC awarded over $18 million to a whistleblower who provided original information that led the CFTC and another authority to bring enforcement actions. The whistleblower’s submission included both information the whistleblower obtained from nonpublic sources and independent analysis of publicly available information. Not only was the whistleblower’s information highly significant to the CFTC’s investigation, but it also led the other authority to open an investigation and bring a related action.
How do I report fraud or misconduct to the CFTC?
If you suspect misconduct or fraud, contact a lawyer, such as a member of Cohen Milstein’s Whistleblower practice, who can counsel you on the Whistleblower process and help you complete and submit the tip, complaint, and referral form for the CFTC (CFTC Form TCR) or any other relevant federal agency.
Such consultations are confidential and free-of-charge.
What type of information is needed?
In addition to your personal observations and a completed Form TCR, the CFTC requires supporting information that is original and not in the public sphere.
Does the CFTC offer a whistleblower award for reporting fraud or misconduct?
Yes. As discussed above, if your information leads to a successful enforcement action resulting in more than $1 million in monetary sanctions, you will receive an award ranging from 10-30% of any amount collected.
Where do I find more about reporting fraud to federal agencies and becoming a whistleblower?
The CFTC’s Whistleblower Program provides comprehensive guidelines on reporting fraud and the whistleblower process.
You can also contact a member of Cohen Milstein’s Whistleblower practice for a confidential and free-of-charge consultation.
When Reporting, Is Legal Counsel Needed?
While it is not necessary to engage legal counsel at the time of reporting suspicious activities, it is recommended. Legal counsel specializing in Dodd-Frank related whistleblower matters can assist in not only assessing the gravity of the suspicious activity but completing the necessary agency documents, forms, and submitting corresponding evidence. Furthermore, having counsel is recommended if a federal agency such as the CFTC chooses to proceed with an investigation.
Confidentiality is a premium to the success of both programs.
About the Author
Christina McGlosson, special counsel in Cohen Milstein’s Whistleblower practice, focuses exclusively on Dodd-Frank Whistleblower representation. She is the former acting director of the Whistleblower Office in the Division of Enforcement at the U.S. Commodity Futures Trading Commission. She was also a senior attorney in the SEC’s Division of Enforcement, where she assisted in drafting the SEC rules to implement the whistleblower provisions of Dodd-Frank and served as senior counsel to the SEC Enforcement Division’s Director.
Christina represents whistleblowers in the presentation and prosecution of fraud claims before the SEC, CFTC, FinCen, as part of the U.S. Treasury, the Department of Justice, and other government agencies.
Christina McGlosson, Special Counsel: Dodd-Frank Whistleblower Practice
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, NW
Washington, DC 20005
E: cmcglosson@cohenmilstein.com
T. 202-988-3970
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