CFTC Awards More Than $2 Million to Whistleblower
The Commodity Futures Trading Commission (“CFTC”) announced a whistleblower award totaling more than $2 million to be paid to an individual whistleblower. The CFTC granted the whistleblower’s award application for both a CFTC action and a related action brought by another federal regulator.
CFTC’s Whistleblower Program was created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFTC can pay awards not only on CFTC enforcement actions, but also on related actions brought by other federal regulators if certain conditions are met. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected.
The CFTC has also has adopted amendments to enhance its whistleblower rules, strengthening anti-retaliation protections and enhancing the process for reviewing whistleblower claims. The enhanced CFTC Whistleblower protections include:
- Under Rule 165.19, a person may not take any action to impede an individual from communicating directly with the CFTC’s staff about a possible violation of the CEA, including by enforcing, or threatening to enforce, a confidentiality agreement or pre-dispute arbitration agreement with respect to such communication.
- Under Rule 165.20, the CFTC has authority to bring an action against an employer who retaliates against a whistleblower, irrespective of whether the whistleblower qualifies for an award.
To view the press release, please click here.
Kennyhertz Perry advises clients on a wide range of commodities and derivatives regulatory matters. Kennyhertz Perry has experience in all types of derivative transactions and design structures to meet clients’ specific trading, financial and/or credit needs. The roots of the practice are in the commodities markets, where Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission. Our lawyers regularly advise our clients on compliance with the complex laws and regulations governing the securities and derivatives industries, including the Commodity Futures Modernization Act of 2000, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, the Securities Acts of 1933 and 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the SEC and CFTC regulations, the rules of the various derivatives exchanges and clearinghouses and other industry self-regulatory organizations and the “Blue Sky” state securities laws. Keeping abreast of regulatory developments is imperative, and enables our lawyers to guide clients on comment-making about proposed legislation and regulation, provide ongoing operational and compliance counseling, and offer advice on appropriate modifications of transaction structure and documentation.
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