CFTC

CFTC Issues a Record-Setting $200 Million Whistleblower Award

The Commodity Futures Trading Commission announced an award of nearly $200 million to a whistleblower who provided the CFTC with information and assistance that led to enforcement actions by three regulators.

The CFTC said that the tipster’s “specific, credible, and timely original information” helped substantially advance an already open investigation. His assistance led to a successful CFTC’s enforcement action, as well as two related actions spanning different countries, one by another unidentified US federal agency and a third action by a foreign regulator.

The insider had provided information that helped these regulators’ probes that led to roughly $3.0 billion in settlements and monetary sanctions.

The $200 million is the largest amount ever awarded under the CFTC’s whistleblower program and far surpasses the next-largest award of $100 million made to an individual in July 2021.

The whistleblower could even get a higher bounty as he submitted a payout claim in connection with a third related action by a state regulator. However, his request was denied because the tips he provided was never shared with that state regulator.

The US regulators consider several factors in determining the size of whistleblower awards. As long as their internal disclosure prompted a company investigation, they can benefit from all the information discovered in that investigation.

The US derivatives regulator announced the awards Thursday but didn’t name the cases involving the entities that the awards are connected to and didn’t identify the tipster’s identity, in keeping with its policy.

“In order to qualify for an award, a whistleblower who significantly contributed to the success of an enforcement action must demonstrate that there is a “meaningful nexus” between the information provided and the CFTC’s ability to successfully complete its investigation, and to either obtain a settlement or prevail in a litigated proceeding. The Commission determined here that the whistleblower met this standard,” the agency explains.

Earlier in July, the CFTC awarded about $100 million to a former Deutsche Bank AG executive in a case related to manipulating the Libor, a benchmark interest rate used to set short-term loans for global banks.

The massive payouts raise the profile of the US regulators’ whistleblower programs, which have awarded close to $1.5 billion since it was created by the Dodd-Frank Act in 2010.