The US Commodity Futures Trading Commission (CFTC) awarded approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action and assistance to CFTC staff during the course of the investigation. This is the largest whistleblower award that the CFTC has issued to date, nearly tripling the previous largest award of approximately $10 million, which was issued in March 2016. With this award, the CFTC demonstrates to the market that it will issue significant awards to whistleblowers who come forward with quality information of violations of the Commodity Exchange Act if the information leads to a successful enforcement action.
In issuing this award, the CFTC stated the following:
- The information provided by the whistleblower was specific, timely, and credible and caused CFTC staff to launch an investigation.
- The CFTC was not aware of the violations before the whistleblower provided the information.
- The whistleblower was extensively involved in the investigation and was truthful, forthcoming, and cooperative.
- The whistleblower’s willingness to provide the CFTC with ongoing, extensive, and timely assistance conserved CFTC resources.
This latest award signals the value and importance that the CFTC places on its whistleblower program and the attention the CFTC pays to information it has received and continues to receive from whistleblowers. The CFTC’s director of the Division of Enforcement stated that “[w]histleblower submissions have become a significant part of our enforcement program, allowing us to pursue violations we might otherwise have been unable to detect,” and “[we] expect the Whistleblower Program to contribute even more substantially to [the CFTC’s] enforcement efforts going forward.”
The magnitude of this latest whistleblower award will not go unnoticed by potential whistleblowers and should not be ignored by employers in the energy industry and traders of oil, gas, and power derivatives. Employers in the energy industry should review their compliance programs and related policies to confirm that they are robust and consistent with best practices. This includes ensuring that the compliance programs and policies make known the avenues through which employees can bring compliance concerns to management’s attention, encourage employees to raise compliance concerns, ensure that any compliance concerns are fully addressed in a timely manner, and, if appropriate, close the loop with employees on how their concerns are being addressed.