CFTC Whistleblower Program Pays Over $75 Million to Dodd Frank Whistleblowers in 2018
The CFTC whistleblower reward program was established by the 2010 Dodd Frank Act to protect the U.S. economy and American public. The program pays monetary awards to qui tam whistleblowers who provide information that leads the CFTC to bring a successful enforcement action exceeding a million dollars for violations of the Commodity Exchange Act.
After a slow start the program, the CFTC reported in 2017 that it expected to pay $45.5 million in qui tam awards in 2018 to Dodd Frank whistleblowers. However, 2018 was even more successful than predicted, with more than $75 million paid to whistleblowers who reported commodities fraud. This includes a whistleblower award of approximately $30 million, the largest whistleblower award to-date in a commodities fraud case, in July given to a whistleblower who voluntarily provided key original information that led to a successful enforcement action.
Another first for the program came when a whistleblower reward of $70,000 was issued to a foreign whistleblower, living outside the United States, who provided valuable information that significantly contributed to an ongoing investigation and led the CFTC to a successful settlement of the matter. Other awards paid to multiple qui tam whistleblowers by the CFTC this year totaled $45 million.
“Paying whistleblower rewards has proven to be the most effective way to stop financial fraud,” said whistleblower attorney, Stephen M. Kohn. “The ability of foreign nationals to qualify for whistleblower rewards under U.S. laws is significant because it signals to whistleblowers around the world that anyone with information about potential violations are eligible for monetary whistleblower rewards,” continued Kohn, partner at Kohn, Kohn & Colapinto, LLP, a firm of qui tam lawyers. Kohn also serves pro bono as the executive director of the National Whistleblower Center.
The CFTC’s Whistleblower Program pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information on violations of the Commodity Exchange Act that leads to a successful enforcement action resulting in monetary sanctions exceeding $1,000,000. Rewards under the program are mandatory for qualified whistleblowers and must be paid in the range of 10-30% of the collected proceeds. Employers cannot retaliate against whistleblowers or encumber potential whistleblowers from communicating with the CFTC.
The CFTC saw a 63% increase in the number of tips and complaints filed under the Dodd Frank whistleblower program from those received in 2017. The increase is due to increased awareness of about the program. Whistleblowers have long been on the front lines of conducting effective financial regulation, as financial scandals ranging from Enron to tax fraud in Swiss banks have been uncovered because of whistleblowers. Paying whistleblower rewards is well established as one of the most effective ways to ensure that financial scandals come to light and to protect consumers and taxpayers from fraud and illegal conduct.