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Record Setting, Record Keeping – the CFTC Whistleblower Program is Alive & Well
Record-setting whistleblower awards seem to be the rule rather than the exception nowadays, with a recent record $900 million for a non-intervened False Claims Act whistleblower matter involving pharmaceutical kickbacks for physicians, and now the U.S. Commodity Futures Trading Commission (CFTC) settling with multiple financial institutions for $710 million, meaning that the whistleblower award in this case could potentially be 30% of the recovery or an eye-popping $200 million.
The CFTC serves the important role of regulating commodities and futures, just as the SEC regulates securities. But oversight is not effective unless regulated entities keep proper records. The Defendants who settled this CFTC action (Bank of America, Goldman Sachs, and Deutsche Bank, although Barclays, Cantor Fitzgerald, Citi, Credit Suisse, Jefferies, Morgan Stanley, Nomura, and UBS were also charged) were all found to have allowed employees to send internal and external work communications using personal text, WhatsApp, or Signal, and thereby evade record-keeping requirements.
Thus, some of their business activities were shrouded in secrecy. This made CFTC oversight challenging if not impossible. In the end, this secrecy proved very expensive, since the CFTC found these violations serious enough to levy this huge fine.
One of they key takeaways in this expensive action is that the government has a keen interest in prosecuting regulatory violations by financial institutions. A potential whistleblower who is aware of such violations should speak with a CFTC whistleblower law firm or SEC whistleblower law firm to understand their potential rights when blowing the whistle. The use of a whistleblower law firm may enable the insider to blow the whistle anonymously and recover up to 30% of what the government recovers.
Burn After Reading may have been a popular book (and a less popular movie), but the CFTC has made it clear that companies who burn their paper trails will also be burning money when they have to pay for the transgression. Despite criticism the CFTC and SEC whistleblower programs have received, they are critical programs to incentivize insiders to blow the whistle. A recent analysis of the CFTC program shows since its inception in 2014, the CFTC has helped keep companies in check and has been profitable for the taxpayers netting over $2.5 billion. If you’re surprised by the action the CFTC took here, you may be more surprised to learn a government program is actually profitable.
If you see something, say something, and if you have inside information about serious systemic regulatory infractions you should speak with a CFTC whistleblower law firm or an SEC whistleblower law firm that can offer you a free, confidential consultation about your rights.