Another Blockbuster Year for SEC & CFTC Whistleblower Law Firms

December 6, 2021


Whistleblower awards have continued on a record pace this year for individuals who blew the whistle the right way with the right whistleblower law firm.  Record-setting whistleblower awards were issued by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as conscientious whistleblowers and whistleblower law firms took full advantage of those agencies’ respective whistleblower programs.

In September, the SEC announced a $36 million award to an SEC whistleblower who provided critical information about securities law violations that led to successful enforcement actions. The SEC noted that the whistleblower provided key documents and identified key witnesses related to an illegal scheme. The $36 million is among the top 10 whistleblower awards ever issued by the SEC. In total, the agency awarded over $560 million in whistleblower awards this year.

A month later, the CFTC issued a record-high whistleblower award of nearly $200 million. The CFTC has increasingly turned to whistleblowers in its efforts to curb illegal conduct in the commodities and derivatives markets. The director of the CFTC Whistleblower Program recently remarked that nearly a third of all ongoing investigations by the CFTC involved a whistleblower.

By issuing these SEC whistleblower and CFTC whistleblower awards, the agencies have signaled their willingness to discount or even overlook a whistleblower’s own culpability or delay in reporting misconduct. The SEC whistleblower who received the $36 million award sat on relevant information for over five years, and further allegedly played a role in the illegal scheme. Rather than denying an award entirely, the SEC chose to reduce the award by an amount that “strikes an appropriate balance” between rewarding the whistleblower’s contributions to the enforcement action and punishing his alleged personal misconduct. However, it is important to note that the whistleblower did not direct, plan, or initiate the illegal conduct, which would have rendered him ineligible for the award pursuant to Exchange Act Rule 21F-16.  Such critical distinctions make it more important than ever to consult with an experienced SEC whistleblower law firm if you are thinking about blowing the whistle, but have concerns that you may have some exposure for your conduct.

The CFTC whistleblower who received the $200 million whistleblower award also had allegedly unreasonably delayed reporting the violation and failed to fully cooperate with the agency’s investigation. The CFTC initially had indicated its intention to deny an award altogether. The CFTC whistleblower attorney, however, submitted a timely request for reconsideration along with detailed information about the whistleblower’s contributions to the successful enforcement action. The attorney’s efforts paid off big, as the CFTC changed its initial determination and awarded the $200 million.

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The CFTC case highlights the benefits of employing competent and experienced counsel who can seamlessly interface with agency officials. In addition, both the SEC and CFTC have strict requirements for submitting information and claiming whistleblower awards, and an experienced whistleblower law firm can help ensure compliance with these rules to maximize the chances of obtaining an award. Lastly, by submitting a claim to the SEC or CFTC through counsel, a whistleblower can initiate the process anonymously, and sometimes may even remain anonymous from start to finish, but you should discuss those options with your whistleblower attorney.

Brown, LLC is a premier whistleblower law firm led by a former FBI Special Agent and Legal Advisor. The whistleblower attorneys at Brown, LLC, offer free, confidential consultation. If you have credible allegations and information regarding securities fraud, insider trading or commodity exchange violations, please call Brown, LLC at (877) 561-0000 for a free whistleblower consultation.