On August 30, the Commodity Futures Trading Commission published in the Federal Register proposed amendments to its whistleblower awards process (17 CFR Part 165). The proposed amendments are designed to clarify the process for reviewing whistleblower claims and to reinterpret the CFTC’s authority as it relates to retaliation against whistleblowers.
The CFTC’s current whistleblower rules allow for the payment of awards to those who voluntarily provide the CFTC with original information about a violation of the Commodity Exchange Act (CEA) that leads to a successful enforcement action with monetary sanctions exceeding $1 million, or the successful enforcement of a related action, or both. The proposed amendments clarify eligibility requirements to receive an award and extend the timeframe during which a claimant may seek an award after the claimant has provided the same information to another entity, such as Congress or another federal or state authority.
The proposed amendments also further define the review process of a whistleblower claim, including assigning overall responsibility for administering the program to the director of the Division of Enforcement and establishing several methods for a claimant to contest the determinations of CFTC staff. The CFTC notes that the amendments will establish a process that is similar to the Security and Exchange Commission’s whistleblower program.
Finally, the CFTC disavows its prior interpretation with regard to its authority to take enforcement action against violators of the anti-retaliation provisions of CEA. Whereas previously the CFTC stated that it believed it lacked the statutory authority to conclude that retaliation against a whistleblower could be subject to an enforcement action as an independent violation of the CEA, the CFTC now indicates that retaliation against a whistleblower is a separate violation of the CEA subject to the CFTC’s enforcement powers.
The proposed amendments are available here. Comments with respect to the proposed amendments must be received on or before September 29.