NOVEMBER 22, 2023. The Commodity Futures Trading Commission (CFTC) has released their Annual Report on their Whistleblower Program and Customer Education Initiatives, shedding light on the work of the Commission and the continued importance of whistleblowers in carrying out that work.
The CFTC was created with the passage of the 1974 Commodity Futures Trading Commission Act and was bolstered in 2010 through the Dodd-Frank Wall Street Reform and Consumer Protection Act. This amended the Commodity Exchange Act (CEA), adding Commodity Whistleblower Incentives and Protection. This empowered the CFTC to pay awards to eligible whistleblowers who provide the Commission with original information pertaining to violations of the CEA that lead to a “covered judicial or administrative action” or “related action.” The information provided must be given voluntarily to qualify. Those who provide information are entitled to confidentiality and anti-retaliation measures to ensure CFTC whistleblowers are protected. In addition to this, the CFTC also created customer education initiatives to inform employees about potential avenues for fraud in their industry.
Highlighted in the report were the seven applications for whistleblower awards that were granted, amounting to $16 million. One of those whistleblowers was awarded $15 million for voluntarily providing information that led the Commission to investigate the matter that led to a covered action. In addition to providing information, this whistleblower provided extensive support to the Commission, interpreting evidence, and bringing witnesses. In total, the CFTC issued 141 Final Orders in the 2023 Fiscal Year, with five of those granting whistleblower awards. One of these Final Orders granted awards to three separate whistleblowers for the same matter. Since its creation in 2010 through the 2023 Fiscal Year, the Whistleblower Program has issued 41 orders granting almost $350 million in awards. The CFTC has ordered over $3 billion in sanctions in the same period.
The report also highlighted the CFTC’s education initiatives, specifically its campaign targeted at the carbon markets. In June, the Commission issued an alert regarding misconduct and illicit activities in the sector. The Whistleblower Office is working with market participants who want to report information related to potential carbon markets fraud, identifying issues such as double counting, fraudulent carbon credit statements, and manipulative trading tactics. The Office of Customer Education and Outreach (OCEO) seeks to bolster “customer education initiatives designed to help customers protect themselves against fraud or other violations of [the CEA], or the rules and regulations thereunder.” In all, the OCEO conducted over 20 hours of presentations, reaching 2,500 members of the public.
The CFTC Chairman said, “The Commission continues to remain laser-focused on stopping and deterring fraud and manipulation in the U.S. … At a time of great uncertainty and volatility, healthy U.S. commodity markets are paramount to ensuring a strong economy. The CFTC will continue to take all necessary action to protect customer funds and ensure fair prices for U.S. consumers.”
If you would like to report securities, commodities, and banking fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act and FIRREA. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act and FIRREA cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at r[email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.