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

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, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower…

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

Employment, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has the unusual experience of testifying in federal court in connection with investigations. 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.

Thought Leadership and Accolades. Steven was named 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 has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

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 U.S. Library of Congress Burton Award Winner for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often 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.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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