CFTC Whistleblower Program

The Commodity Futures Trading Commission’s (CFTC) Whistleblower Program provides monetary incentives to individuals who report violations of the Commodity Exchange Act. Violations of the Act typically fall into one of three categories: fraud, market manipulation, and trade practice violations.

Fraud can consist of fraudulent solicitation, misappropriation of customer funds, Ponzi schemes, and foreign currency trading schemes;
Market manipulation includes the use of illicit trading strategies designed to manipulate prices, or spoofing, where a party enters a trade order with the intent to cancel it before it is consummated; and
Trade practice violations including wash sales, noncompetitive transactions, and failures to comply with applicable record-keeping and audit trail rules.

Common violations of the Act include cryptocurrency scams, precious metals trading scams, and corrupt practices in the commodities and derivatives markets.

Who can be a Whistleblower?

Any individual who is aware of a CFTC violation can report a tip to the CFTC through the Whistleblower Program. Whistleblowers can work in conjunction with law firms, such as Kessler Topaz, to submit their information using the CFTC “tip, complaint, or referral” (“TCR”) form. Choosing a knowledgeable whistleblower attorney can help ensure that the whistleblower’s claim is as robust as possible, by connecting the whistleblower’s information to the applicable law, in a way that draws the CFTC’s attention. Additionally, a whistleblower can only remain anonymous if they utilize an attorney to submit their information.

Kessler Topaz, as one of the largest plaintiff’s firms in the nation, has a long track record of successfully fighting financial fraud. Our whistleblower team is comprised of experienced attorneys who have dedicated their careers to representing whistleblowers in the fight against fraud.

What Information is Eligible for an Award?

The CFTC grants a monetary award to whistleblowers who come forward with “original information” about violations of the Commodity Exchange Act. Original information is information that is derived from the independent knowledge or analysis of the whistleblower. Independent knowledge means factual information in the whistleblower’s possession that is not generally known or available to the public. This information can be obtained from the whistleblower’s experiences, conversations or observations in the whistleblower’s personal, business, or social interactions.

There are three scenarios in which a whistleblower’s provision of information can lead to a monetary award, if the CFTC ultimately prevails in their enforcement action.

If the information a whistleblower provides to the CFTC is sufficiently specific, credible, and timely to cause the CFTC to open an investigation;
If a whistleblower gives the CFTC original information about conduct that was already under federal or state investigation, and the whistleblower’s submission significantly contributes to the success of the CFTC’s action; or
If a whistleblower reports original information through an entity’s internal whistleblower mechanism, and submits that information to the CFTC within 180 days of the initial reporting.

How Does a Whistleblower Obtain an Award?

If the CFTC brings a successful enforcement action, a whistleblower who submitted information about the unlawful activity can file an award application (a “Form WB-APP”) with the CFTC. Whistleblower attorneys, including Kessler Topaz, can help whistleblowers craft these award applications to make sure the CFTC understands the value of the information provided and the risks the whistleblower took to come forward. Kessler Topaz’s whistleblower practice is comprised of experienced attorneys who have prosecuted securities and financial fraud cases against the biggest companies in the world. This real-world experience equips our team with the valuable insights and approaches that whistleblowers need.

If the Form WB-APP is approved by the CFTC, then the CFTC will determine the whistleblower’s award and contact the whistleblower.

How Does the CFTC Calculate Awards?

Whistleblower awards are granted in connection with a covered judicial or administrative action, and will be an aggregate amount equal to more than 10% of the total recovered and less than 30% of the total. The CFTC looks to the significance of the information provided, the degree of assistance provided by the whistleblower, and internal CFTC considerations. Awards can range in size, but in the past decade there have been several substantial awards given to whistleblowers. In October 2021, a whistleblower’s information resulted in monetary sanctions on a company committing fraud, and the whistleblower received nearly $200 million for providing specific, credible, and timely original information to the CFTC. In October 2023, a whistleblower received over $18 million for their provision of information, and in March 2024, a whistleblower received approximately $1.25 million for reporting misconduct.

Are Whistleblowers Protected if they Submit a Tip?

The CFTC understands that whistleblowers are faced with an incredibly daunting decision to come forward with information about fraud. Those who do demonstrate courage. It is the bravery of whistleblowers that allows the government to expose fraud. The CFTC whistleblower program contains protections for whistleblowers who face retaliation for their decision to come forward.

Any employer who fires, demotes, suspends, threatens or harasses a whistleblower can be sued in federal court for up to two years after the retaliatory act. The whistleblower may receive reinstatement, back pay, and compensation for other expenses if they prove the retaliation occurred. In addition to helping whistleblowers bring claims, the attorneys at Kessler Topaz have also worked with whistleblowers who have faced retaliation to ensure that any acts of discrimination against them as a result of coming forward were fought against to the fullest extent of the law.