October 26, 2021

Volume XI, Number 299

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October 26, 2021

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October 25, 2021

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CFTC Announces $9 Million Whistleblower Award

Today the CFTC today announced an award of approximately $9 million to a whistleblower that provided original information that led to a successful enforcement action.  Under the CFTC Whistleblower Reward Program, the CFTC issues rewards to whistleblowers who provide original information that leads to CFTC enforcement actions with total civil penalties in excess of $1 million. A whistleblower may receive an award of between 10% and 30% of the total monetary sanctions collected.

Original information “leads to” a successful enforcement action if either:

  1. The original information caused the staff to open an investigation, reopen an investigation, or inquire into different conduct as part of a current investigation, and the Commission brought a successful action based in whole or in part on conduct that was the subject of the original information; or
  2. The conduct was already under examination or investigation, and the original information significantly contributed to the success of the action.

Since 2014, the CFTC has issued more than $120 million in awards to whistleblowers. Whistleblower disclosures have enabled the CFTC to recover nearly $1 billion.

The order announcing the $9 million award clarifies that the CFTC has broad discretion to determine the appropriate percentage of a whistleblower award:

The determination of the appropriate percentage of a whistleblower award involves a highly individualized review of the facts and circumstances. Depending upon the facts and circumstances of each case, some factors may not be applicable or may deserve greater weight than others. The analytical framework in the Rules provides general principles without mandating a particular result . . . [T]he Rules do not specify how much any factor in Rule 165.9(b) or (c) should increase or decrease the award percentage. Not satisfying any one of the positive factors does not mean that the award percentage must be less than 30%, and the converse is true. Not having any one of the negative factors does not mean the award percentage must be greater than 10%. These principles serve to prevent a vital whistleblower from being penalized for not satisfying the positive factors. For example, a whistleblower who provides the Commission with significant information and substantial assistance such as testifying at trial and producing documents containing direct evidence of violations could receive 30% even if the whistleblower did not participate in any internal compliance systems. In contrast, in order to prevent a windfall, a whistleblower who provides some useful but partial information and limited assistance to the Commission may receive 10% even if none of the negative factors were present.

Since FY 2016, the CFTC has issued more than $120 million in CFTC whistleblower awards. The largest CFTC whistleblower awards to date are:

  • $45 million CFTC whistleblower award (August 2, 2018);
  • $30 million CFTC whistleblower award (July 12, 2018);
  • $10 million CFTC whistleblower award (March 28, 2016);
  • $9 million CFTC whistleblower award (July 27, 2020);
  • $7 million CFTC whistleblower award (September 27, 2019);
  • $6 million CFTCwhistleblower award (June 9, 2020); and
  • $2.5 million CFTC whistleblower award (June 24, 2019).
© 2021 Zuckerman LawNational Law Review, Volume X, Number 210
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About this Author

Jason Zuckerman, Whistleblower Litigation Attorney, Washington DC  Law Firm
Principal

Described by the National Law Journal as a “leading whistleblower attorney,” Jason Zuckerman litigates whistleblowe r retaliation, whistleblower rewards, wrongful discharge, and other employment-related claims. His practice focuses on representing senior executives and senior professionals in high-...

(202) 262-8959
Matthew Stock, CPA, Auditor, Zuckerman Law Firm
Certified Public Accountant

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He is an attorney, Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. Mr. Stock has audited a broad range of industries, both domestically and internationally, including large public companies and financial institutions. As an auditor, Mr. Stock developed an expertise in financial statement analysis and fraud recognition.

At Zuckerman Law, Mr. Stock leverages his experience as an attorney, CPA, CFE and external auditor to...

202-930-5901
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