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SEC and CFTC Whistleblower Programs

The SEC and CFTC have robust whistleblower programs that reward whistleblowers who report financial fraud.

SEC Whistleblower Program

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), which directed the Securities and Exchange Commission (“SEC”) to establish a whistleblower program. Under the program, which is administered by the SEC’s Office of the Whistleblower, individuals who provide the SEC with original information leading to an enforcement action that results in over $1 million in monetary sanctions are entitled to receive an award from 10% to 30% of the monies collected. Since its inception, the SEC whistleblower program has awarded more than $1 billion to whistleblowers, including multiple awards over $100 million.

The SEC has broad jurisdiction over financial and investment fraud. Examples of the type of fraud the SEC investigates under its whistleblower program include:

  • The manipulation of a security’s price or volume
  • Insider trading
  • Fraudulent or unregistered securities offering
  • False or misleading statements about a company
  • Initial coin offerings and cryptocurrencies
  • Any other fraudulent conduct involving securities

CFTC Whistleblower Program

Dodd Frank also led to the creation of the Commodity Futures Trading Commission (“CFTC”) whistleblower program. Under the program, individuals who provide the CFTC with information regarding violations of the Commodity Exchange Act that leads to a successful enforcement action of more than $1 million in monetary sanctions are entitled to receive an award from 10% to 30% of the monies collected. Since issuing its first award in 2014, the CFTC has awarded approximately $330 million to whistleblowers, and enforcement actions associated with those awards have resulted in monetary relief totaling more than $3 billion. The largest CFTC whistleblower award to date is $200 million.

While the SEC whistleblower program concerns securities fraud, the CFTC program handles violations of the Commodity Exchange Act, the federal statute that is responsible for regulating the trading of commodity futures in the United States. Accordingly, the CFTC whistleblower program is interested in tips regarding commodity futures, commodity options, swap trading markets, derivatives, and foreign corrupt practices.

SEC and CFTC Whistleblowers: Eligibility, Tips and Awards

While the SEC and CFTC whistleblower programs have important substantive differences, they share many of the same procedures.

  • Eligibility: Under both programs, individuals who are ineligible for rewards include (but are not limited to): government employees and employees of self-regulatory organizations; anyone criminally convicted for the violation they report; and officers, directors, and those involved in audit and compliance functions, subject to certain exceptions.
  • Filing a Tip: Under both programs, a whistleblower must submit a Form TCR (Tip, Complaint, or Referral). Whistleblowers may file tips under both programs anonymously provided they are represented by an attorney. Both the SEC and CFTC are required by law to make best efforts to preserve the confidentiality of information provided by whistleblowers, including their identities.
  • Obtaining an award: When they successfully complete an enforcement action, both the SEC and CFTC publish a Notice of Covered Action. To receive an award under either program, a whistleblower must submit a further claim to the respective agency within a limited amount of time.

Contact Us

If you think you may have information relating to financial and investment fraud, fill out our contact form or call us at (212) 376-5666 for a free evaluation of your potential case. We represent our whistleblower clients on a contingent fee basis, meaning that an attorney’s fee is paid only if your case is successful.