The SEC’s whistleblower program has received tremendous attention, but let’s not forget about the Commodity Futures Trading Commission’s (CFTC) whistleblower program, which also was created by Dodd-Frank (here are the applicable rules). A recent article from the Risk & Compliance Journal of the Wall Street Journal provides valuable insight into how this program is functioning with comments from Director Christopher Ehrman.
CFTC tips increased from 58 in fiscal 2012 to 138 in fiscal 2013. That’s a much smaller figure than the 3,001 tips received by the SEC in 2012, but CFTC enforcement is likely to increase over the coming years. With respect to the types of tips the CFTC has been receiving, Mr. Ehrman said:
Some of the tips involve price manipulation, disseminating false information into the marketplace, trading ahead or frontrunning customer orders. They have general sort of trade practice violations like wash sales. Then there are some about Ponzi schemes and foreign exchange fraud.
Notably, Mr. Ehrman indicated that, unlike the SEC Office of the Whistleblower, the view of the CFTC is that it does not enforce the anti-retaliation provisions of Dodd-Frank, although its view could change in the future. It should be recognized, though, that CFTC regulations provide that the anti-retaliation protections of the Commodity Exchange Act apply regardless of whether the whistleblower qualifies for an award.
In short, although the CFTC whistleblower program is at a young stage, and has received less attention than the SEC bounty program, it has been receiving and acting on significant whistleblower tips and its activity is likely to increase in the future. Employers subject to CFTC rules should take heed.