CFTC Awards More Than $1.8 Million to Two Whistleblowers in Investor Fraud Cases

Key Takeaways

• More Than $1.8 Million Awarded: Two whistleblowers will share awards exceeding $1.8 million.
• Fraud Uncovered: Their information significantly contributed to enforcement actions involving defrauded investors.
• Program Scale: Since 2014, the CFTC has awarded more than $395 million linked to cases generating over $3.3 billion in sanctions.
• Identity Protected: The agency did not disclose the cases or exact award amounts to safeguard whistleblower confidentiality.
• No Cost to Victims: Awards are paid from the Customer Protection Fund, financed by penalties paid by violators.

Deep Dive

Two whistleblowers who helped expose fraud harming investors are set to receive more than $1.8 million, after the Commodity Futures Trading Commission said their information played a meaningful role in successful enforcement actions.

The awards, announced on December 19, underscore the central role whistleblowers continue to play in the CFTC’s enforcement work, particularly in cases where misconduct might otherwise remain hidden.

“We are grateful to the whistleblowers for coming forward,” said Cynthia Lie, acting director of the CFTC’s Whistleblower Office. She said the individuals demonstrated “courage and commitment to the public interest” and provided assistance that helped the agency identify fraud and return unlawfully obtained funds to American investors.

Behind the scenes, the agency credited Whistleblower Office staff Dan Schiffer, Laurence Tai, and Sherri Borman with handling the awards process.

The CFTC’s whistleblower program was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and began issuing awards in 2014. Under the program, individuals who voluntarily provide original information that leads to a successful enforcement action may receive between 10 and 30 percent of the monetary sanctions collected. Awards can be tied not only to CFTC actions, but also to related cases brought by other U.S. or foreign regulators, provided certain conditions are met.

Since its launch, the program has grown into a major enforcement tool. The agency said whistleblower awards to date are associated with enforcement actions that have produced more than $3.3 billion in monetary sanctions, reinforcing the financial and deterrent impact of insider reporting.

Confidentiality remains a cornerstone of the program. The Commodity Exchange Act prohibits the CFTC from disclosing information that could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances. Consistent with that requirement, the agency does not identify the enforcement actions tied to specific awards or publish the precise dollar amounts paid to individual whistleblowers.

The CFTC also emphasized that whistleblower payments do not come at the expense of harmed investors. All awards are paid from the Customer Protection Fund, which is funded entirely by monetary sanctions paid by violators of the Commodity Exchange Act, not by customer losses.

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