CFTC Announces Largest Whistleblower Award to Date: $10M

The U.S. Commodity Futures Trading Commission (CFTC) just that announced it will pay the sum of $10 million as an award to a Whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term, as permitted using funds set aside for such Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term from the Customer Protection Fund, trumping the last award the agency delved out by over $9.7 million last September.

According to the agency's press release, the amount is the largest award made under the Whistleblower Program to date and the third it has given out under the Dodd-Frank supported program which awards those that provide valuable information about Commodity Exchange Act (CEA) violations.

Since the program pays between 10-30% of the monetary sanctions collected, the $10 million award could represent anywhere from roughly $34 million to as much as $100 million in related sanctioned amounts in connection with the CFTC announcement today.

Incentives just got bigger

“By providing robust financial incentives and enhanced protections to whistleblowers, the Commission incentivizes people to come forward with high quality information about serious violations of the law that we might not otherwise uncover. An award this size shows the importance that the Commission places on incentivizing future whistleblowers,” commented Aitan Goelman, Director of the CFTC’s Division of Enforcement, as quoted in the press release.

Director of the CFTC’s Whistleblower Office, Christopher Ehrman, added in the announcement: “The Whistleblower Program is working. My hope is that this multimillion dollar award will encourage others to come forward with information that will assist the Commission in protecting our markets.”

By nature of the program, the recipient’s details are kept confidential by the agency, and weren’t made public with the press release. Meanwhile, the recipient could choose to boast about the awarded compensation or otherwise highlight it positively - as a number of persons have been vocal and outspoken about challenges in the industry. Such as the SEC self-proclaimed whistleblower recipient, Eric Hunsader of Nanex, a long-time anti-HFT critic, who recently was paid a sum of 750,000 under an SEC program according to his subsequent Twitter posts around the time of that news.