Crime Can Pay if You Blow the Whistle

The Commodity Futures Trading Commission (“CFTC”) is an independent U.S. federal agency established by the Commodity Futures Trading Commission Act of 1974. The CFTC’s Whistleblower Program was created by the Dodd-Frank Act, adding a section called “Commodity Whistleblower Incentives and Protection” to the Commodity Exchange Act. Whistleblowers are eligible for 10-30% of the monetary award the regulator collects if the information leads to an SEC enforcement action with sanctions over $1 million.

On July 12, 2018, the CFTC’s Whistleblower Program announced its largest award yet – $30 million to a J.P. Morgan Chase whistleblower – triple its previous largest award which was awarded in March 2016 and the fifth award under the Program. This $30 million award ties the third-highest award under the U.S. Securities and Exchange Commission’s (SEC) whistleblower program, awarded in September 2014. The $30 million CFTC award announcement comes just weeks after regulators moved to limit the size of these awards.

J. Christopher Giancarlo, Chairman of the CFTC, said that he “hopes that an award of this magnitude will incentivize whistleblowers to come forward with valuable information and provide notice to market participants that individuals are reporting quality information about violations of the Commodity Exchange Act.”

Christopher Ehrman, Director of the CFTC’s Whistleblower Office, said “the number of leads the office receives continues to grow each year by the hundreds. We hope that this award will continue to facilitate the upward momentum and success of the CFTC’s Whistleblower Program by attracting those with knowledge of wrongdoing to come forward.” Time will tell how effective this program will be in the future.