The Dodd-Frank CFTC Whistleblower Program, 7 U.S.C. § 26 provides substantial monetary rewards to whistleblowers who voluntarily provide original information to the CFTC concerning fraud in these markets that results in a successful enforcement action with monetary sanctions exceeding $1 million. The whistleblower must retain a reasonable belief that the information he or she provides constitutes a violation of federal securities laws or regulations.
In the wake of our nation’s most recent financial crisis, Congress passed and the President signed into law a set of laws and regulations intended, among other things, to enforce standards against fraud in our commodity futures, options, and swaps markets by providing incentives for whistleblowers to report fraud to the CFTC by sharing information on fraud that has occurred, is ongoing or will soon occur.
When the following requirements are satisfied, under regulations adopted by the CFTC, whistleblowers will receive rewards in an aggregate amount between 10 and 30 percent of what has been collected by the CFTC of the monetary sanctions imposed in a given case that is. A whistleblower must make sure that: the information is voluntarily provided to the CFTC; the information is original; and the information leads to a successful enforcement action resulting in monetary sanctions of more than $1 million, the CFTC. Importantly, these whistleblower rewards can also include recoveries for any “related actions” that might be brought by certain other federal or state authorities, including the Department of Justice
The CFTC Whistleblower Program began in 2011 and has begun to award CFTC whistleblowers. Most fraud investigations take considerable time to complete and bring to the point of an enforcement action and resolution. It is widely expected that several significant awards will be forthcoming under this CFTC Whistleblower Program each year.
It is critically important, at times determinative, for CFTC whistleblowers to consult with and retain qualified financial fraud attorneys with knowledge of the options, futures and swap markets to investigate, develop and submit a whistleblower claim to the CFTC on a whistleblower’s behalf. This is true for several reasons:
First, a CFTC whistleblower who retains qualified, experienced securities fraud whistleblower counsel may properly submit his or her information to the CFTC through that whistleblower counsel with complete anonymity. That anonymity is maintained throughout the investigation.
Second, the CFTC has been deluged with thousands and thousands of potential whistleblower matters since 2011. Separating quality cases from dead-end leads takes enormous time and resources. A high-caliber submission filed by experienced CFTC whistleblower attorneys with high standards will get attention and focus immediately and ensure the maximum effect and reward from your whistleblower case.
Third, a law firm with broad experience litigating CFTC securities fraud can help a whistleblower determine the strength of his or her allegations and help develop the correct legal theories and factual allegations necessary to build a strong case. Such counsel can also advise whether a claim might more properly be, or additionally be, filed under the SEC or IRS programs or the False Claims Act.
Hagens Berman represents several whistleblower actions under the CFTC and SEC Whistleblower Programs, including representation of high-profile market expert Haim Bodek, and marshals its significant nationwide resources and expertise in financial fraud to best present whistleblower matters to the SEC and CFTC.