CFTC Whistleblowers Lawyers Representing Clients Throughout the United States
The United States Commodity Futures Trading Commission (CFTC) Whistleblower Program provides compensation to those who report unlawful activity in the commodities markets. Futures, swaps, precious metals, crypto currencies, among various other commodities, are complicated financial instruments that are frequently misunderstood and difficult to value. The CFTC regulates the United States markets in these and other similar products in an ongoing and extremely challenging effort to maintain market integrity. In today’s atmosphere of rampant speculation, “product of hour” innovation, and hyped marketing, violations of the Commodities Exchange Act (CEA) abound, allowing unethical parties to use such products to commit fraud and abuse.
Key Provisions of the CFTC Whistleblower Program
The CFTC program has many of the same rules and requirements as the SEC Whistleblower Program.
- Incentives for Whistleblowers: As with the SEC program, for a whistleblower to be eligible for a reward from the CFTC, sanctions levied by the government must exceed $1 million as a result of the enforcement action that arose out of or was enhanced by the whistleblower’s information. Successful CFTC whistleblowers will receive an award between 10% and 30% of the amount the CFTC recovers in sanctions.
- CEA Violations That May Lead to CFTC Whistleblower Claims: Reportable CEA violations can arise out of certain actions made in connection with swaps, options, and futures or that relate to a contract of sale of any commodity in interstate commerce. Fraudsters use various fraudulent schemes, including the misappropriation of customer funds, Ponzi schemes, affinity schemes, and the issuance of false customer accounts. Market manipulation, including trading practices that are disruptive, can also be grounds for filing a CFTC whistleblower tip. Digital asset and market fraud can seem overwhelmingly complicated, but Pugsley Wood attorneys have successfully shepherded whistleblowers through this landscape and can help you bring your concerns to the appropriate regulators.
- Anti-Retaliation Protections: The CFTC Whistleblower Program prohibits employers from retaliating against individuals who report potential violations. Generally, employers cannot fire, demote, suspend, threaten, or otherwise retaliate against someone for exercising their legal right to report wrongful behavior. If an employer does retaliate against an employee, the employee may file civil claims against the employer, and if their claims are successful, they may be granted significant relief, including reinstatement, back wages, and compensation for the cost of pursuing claims. Your protections are not dependent on receiving an award. The CFTC can also file an action against employers that retaliate.
- CFTC Whistleblower Award Eligibility: As with SEC awards, CFTC awards must be based on original information or analysis that is voluntarily provided to the government. Given the reality of modern commodities trading, violators are often based in other countries. Whistleblower complaints against international actors are appropriate if their activities affect US investors and markets. This is a complicated area of the law, and you should have the help of experienced attorneys in evaluating whether and how to report to the CFTC. Pugsley Wood attorneys can work with you to evaluate whether your complaint meets those requirements and can help develop your submission to maximize the possibility of being rewarded for coming forward.
Given the way digital assets and markets fail to fit neatly into traditional categories, it is important to have an experienced and knowledgeable attorney. Often whistleblowers may find themselves in the situation of having to make multiple submissions to both the CFTC and the SEC. Pugsley Wood attorneys have experience dealing with the most complicated financial products, including cryptocurrencies and the burgeoning field of decentralized finance (DeFi), and can assist you in ensuring you make the best decisions where and how to report your information. If you are considering blowing the whistle on a company that is committing CEA violations, our experienced attorneys can help you understand your rights, assess the strength of your case, and guide you through the reporting process. Contact us to schedule a free, confidential consultation.