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FCPA Blog Daily News

« Resource Alert: Guidance from UK government and Basel Institute on Governance | Main | Job: External Member/s of Sanctions Committee »
Monday
May062019

CFTC awards whistleblower $1.5 million

The Commodity Futures Trading Commission Monday granted an "enhanced" award of $1.5 million to a whistleblower who tried to report the problem internally before contacting the CFTC.

The whistleblower provided original information that helped the agency understand a "complex scheme" and interview witnesses about it, the CFTC said.

The whistleblower "attempted to report his/her concerns internally" before reporting the scheme to the government, the CFTC's redacted award order (pdf) said.

“While there is no requirement that a whistleblower report internally before approaching the Commission, today’s award demonstrates that the Commission may pay enhanced awards to those that do -- that is one of the positive factors set out in our rules for the Commission to consider in making its award determination,” Christopher Ehrman, the director of CFTC’s Whistleblower Office, said.

The CFTC denied award applications submitted by four other claimants. Their information was "not useful" to the CFTC's investigation and didn't lead to the successful enforcement action, the agency's order said.

The successful whistleblower also received an award from another federal agency, the CFTC said.

By law, the CFTC protects the confidentiality of whistleblowers and doesn't disclose information that might directly or indirectly reveal a whistleblower’s identity.

The program rewards people who voluntarily report violations of the Commodity Exchange Act if the information leads to a successful CFTC enforcement action resulting in sanctions of more than $1 million.

Since issuing its first award in 2014 the CFTC has awarded more than $85 million to whistleblowers. 

The CFTC regulates the U.S. derivatives markets, including futures, options, and swaps. Its enforcement division investigates violations of the Commodity Exchange Act and the CFTC Regulations, such as fraud, market manipulation, and illegal trade practices.

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Harry Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (1)

We hear this so often – people try to raise issues internally, and only go outside after they have been ignored or worse. We need to do a better job internally, and one key is the independence and empowerment of the person who heads the compliance & ethics office – the chief ethics and compliance officer (CECO). A strong, professional CECO can see to it that someone listens to and acts when a whistleblower raises a concern.

How can we do this? We can ensure that the CECO reports to and can only be terminated by the board. We can adopt the SCCE Code of Professional Ethics for Compliance and Ethics Professionals to apply to all our compliance & ethics professionals, including the CECO. We can be sure the CECO is connected with the leadership and has line of sight into all the operations in the company. We can have the CECO work with, but not beneath, the general counsel, internal auditor, head of HR and others. We can give compliance and ethics professionals throughout the business a strong connection to the CECO so those in the field also have the necessary independence and empowerment.

Or, we can keep paying out huge fines to government enforcers and regulators as our frustrated employees have to turn to the government for action.

Cheers, Joe
May 7, 2019 | Unregistered CommenterJoe Murphy
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