July 23, 2024
A stopgap measure that kept a key US financial regulator’s whistleblower office afloat during a funding crisis is set to expire unless lawmakers revive it, putting the cash-for-tips program in jeopardy.
The Commodity Futures Trading Commission, under a program established by Congress after the 2008 financial crisis, offers awards to whistleblowers whose tips lead to successful enforcement actions. The awards come from a revolving fund capped at $100 million that also pays for the CFTC’s whistleblower office and its staff.
Lawmakers are weighing how to keep the office open if the fund is depleted. Also up for debate is raising the fund’s cap to $300 million, putting it in line with the Securities and Exchange Commission.
“No one thought that we would be awarding whistleblowers anything close to that amount,” said attorney Christina McGlosson, former acting director of the CFTC’s whistleblower office who joined Cohen Milstein Sellers & Toll PLLC in April.
The CFTC’s office has awarded more than $47 million to whistleblowers since September, including an $18 million award in October, according to the agency. More awards are expected.
More than 30% of the CFTC’s enforcement investigations stem from whistleblowers, according to the National Whistleblower Center. The number of tips the office receives more than tripled from fiscal 2019 to 2023, according to agency data.
“There is a pipeline of awards and $100 million is not going to be sufficient,” McGlosson said.
Read CFTC Whistleblower Program at Risk Without Lawmakers’ Help.