The Commodity Futures Trading Commission (“CFTC”) recently released its statutorily mandated 2023 Annual Report detailing the status of its whistleblower program for the fiscal year ending on September 20, 2023.

The CFTC’s whistleblower program pays awards to eligible whistleblowers who voluntarily provide original information about violations of the Commodity Exchange Act (“the Act”) that leads either to a “covered judicial or administrative action” or a “related action.”  The Act also established the CFTC Customer Protection Fund (“the Fund”), which is used to pay whistleblower awards and to fund education initiatives designed to help customers protect themselves against fraud or other violations of the Act.

Whistleblower Tips Received

In FY 2023, the CFTC’s Whistleblower Office (“WBO”) received a record number of tips, recording at total of 1,530.

Whistleblower Tips and Complaints

Source: CFTC 2023 Annual Report

The tips related to a range of potential violations, including market manipulation, spoofing, insider trading, corruption, and fraud and manipulation related to digital assets, and included pump-and-dump schemes, fraudulent representations of moneymaking opportunities, and romance scams.  Of note, over 900 of the 1,530 tips received involved allegations of fraudulent solicitation and subsequent misappropriation of crypto/digital assets.

Whistleblower Awards Granted

The agency awarded a total of $16 million from 7 awards issues in FY 2023 to individuals who voluntarily provided original information that led to successful enforcement actions. Whistleblower awards can range from 10 to 30 percent of monetary sanctions collected from an enforcement case. In total, the WBO reached 301 award applications, setting a new record for the office and roughly doubling the FY 2022 applications.

Whistleblower Award Applications

Source: CFTC 2023 Annual Report

The report states that the increase in the award applications is likely due to the CFTC’s issuance in 2021 of a remarkable $200 million award to a single whistleblower – the largest award ever granted under the Dodd-Frank Act.

Additionally, the report notes a September 2023 announcement of a $15 million whistleblower award.  The CFTC maintains that the whistleblower provided a “high degree” of support including interpreting key evidence, facilitating the appearance of another witness, and helping to conserve the CFTC’s resources.  

The awards issued during FY 2023 illustrate that whistleblowers who provide the CFTC with valuable information continue to be rewarded significantly.  As a result, if would not be surprising to see a continued increase in the number of tips and award applications submitted to the WBO.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

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Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims.

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.

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Photo of Shanice Z. Smith-Banks Shanice Z. Smith-Banks

Shanice is an associate in the Labor and Employment Law Department. Her practice involves litigating claims of unlawful discrimination, harassment, retaliation and whistleblowing. Shanice assists in conducting workplace investigations related to discrimination, harassment, and retaliation. She also counsels clients from a variety of…

Shanice is an associate in the Labor and Employment Law Department. Her practice involves litigating claims of unlawful discrimination, harassment, retaliation and whistleblowing. Shanice assists in conducting workplace investigations related to discrimination, harassment, and retaliation. She also counsels clients from a variety of fields on a range of employment matters.

Shanice earned her J.D. from Loyola University New Orleans College of Law, where she was a Managing Editor of the Loyola University Journal of Public Interest Law and a member of the Trial Advocacy program. Immediately upon graduation from Loyola, Shanice argued a case on behalf of the Loyola Criminal Defense Law Clinic in front of the Louisiana Supreme Court.

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