Law360 (March 18, 2022, 3:32 PM EDT) — The Commodity Futures Trading Commission announced Friday that it has paid a whistleblower roughly $10 million for providing original information that led the CFTC to open an investigation and bring a successful enforcement action, while supplying “interesting color” and “good background information” to boot.
The CFTC award payout order Friday notes that the tipster hit the main requirements to earn an award: They voluntarily provided original information to the commission, leading to the related enforcement action, and they submitted the tips on the required form, known as Form TCR.
The whistleblower also provided “good background information, interesting color, and some context,” according to the partially redacted order. The percentage of the monetary sanctions that the tipster earned is redacted, as the commission aims to hide the identity of its whistleblowers and prevent a linkage to corresponding enforcement actions. Tipsters can earn between 10% and 30% of the total monetary sanctions collected.
“The CFTC is committed to rewarding whistleblowers who identify misconduct in our markets,” Vincent McGonagle, the acting director of the CFTC’s enforcement division, said in an announcement Friday.
The whistleblower gave useful information at the earliest stages of the investigation, allowing enforcement division staff to draft the “earliest round of subpoenas” in the case, according to the order. However, the “breakthrough in the investigations” did not come from the whistleblower’s information, according to the order.
In fact, staff found certain allegations made by the tipster to be untrue, which the redacted document suggests was factored into the award percentage paid.
Since issuing its first award in 2014, the CFTC has now paid whistleblower awards totaling roughly $330 million, according to Friday’s announcement.
The bulk of that came from a historic $200 million award paid out in October, which was linked to a $2.5 billion penalty levied against Deutsche Bank by U.S. and U.K. authorities in 2015. Other big ticket payouts included a $6 million payout in June 2020 and a $9 million payout in July 2020.
“The CFTC has granted a number of multimillion-dollar whistleblower awards to date,” Christopher Ehrman, director of the CFTC’s whistleblower office, said in Friday’s announcement. “These large awards are putting market participants on notice that whistleblowers continue to provide significant information to the Commission.”
–By Al Barbarino. Editing by Patrick Reagan.
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