Whistleblowers and Victims of Fraud
CFTC Whistleblower Program
Lawyers Representing CFTC Whistleblowers Throughout the United States
Futures, swaps, precious metals, crypto currencies, among various other commodities, are complicated financial instruments that are frequently misunderstood and difficult to value. The Commodity Futures Trading Commission (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.
To help reduce the number of CEA violations the federal government established the CFTC whistleblower reward program, which provides compensation to those who report unlawful activity in the commodities markets. The CFTC program has many of the same rules and requirements as the SEC whistleblower program.
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 we represent you, we will work diligently to help you pursue your desired outcome.
CEA Violations That 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.
CFTC Whistleblower Awards
As with SEC awards, CFTC awards must be based on original information or analysis that is voluntarily provided to the government. Pugsley Wood attorneys will 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 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.
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 in sanctions 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.
CFTC Whistleblower Retaliation Claims
Many CFTC whistleblowers work for the entities or individuals they report violated the CEA and, therefore, fear adverse reactions from their employers. CFTC whistleblowers, however, are afforded significant protections against retaliation. 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. Instead, you must show that you harbored a reasonable belief that a violation of the CEA occurred or was about to occur. The CFTC can also file an action against employers that retaliate.
Consult a Skilled Whistleblower Attorney
Crypto, DeFi, futures, and derivative markets are regulated by a complicated scheme that is not always entirely clear. The nature of today’s markets means they are more prone than ever to manipulation and fraud. If you have information regarding a CEA violation, you may be able to make a CFTC whistleblower report, and you should consult an attorney as soon as possible. At Pugsley Wood, LLP, our attorneys have filed numerous whistleblower reports with the CFTC and obtained awards on behalf of our clients, and we can assess your information and determine what course of action is most appropriate. We have offices in Boston and Salt Lake City. You can contact us via our online form or by calling (855) 550-8300 (toll free) to schedule a confidential and free consultation.
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- 1 Over $100 Million in Awards Obtained
- 2 Over 75 Years of Collective Experience
- 3 Handling Cases in the U.S. and Internationally