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.

Posted in CFTC
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
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, Whistleblower, Restrictive Covenant and Trade Secret Practice.…

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, Whistleblower, Restrictive Covenant and Trade Secret Practice. Steven’s national practice focuses on defending companies in federal and state courts and arbitration against claims of: discrimination, retaliation and harassment, including claims brought by high-level executives; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations (including class, collective and PAGA actions).

Illustrating his versatility, Steven has successfully handled bench and jury trials in multiple jurisdictions (e.g., Illinois, California, Florida and Texas); defended one of the largest Illinois-only class actions in the history of the federal courts in Chicago; and prevailed following his oral arguments before the Seventh Circuit and state appellate courts. Steven brings his litigation experience 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 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.

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 was also named as One of the Top 10 Impactful Labor & Employment Lawyers in Illinois for 2023 by Business Today. 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.” Chambers also reports that “He is someone who can navigate the twists and turns of litigation without difficulty. Steven is great with brief-writing, crafting arguments, and making sure the client is always happy.”

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 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. 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.

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.

Read more about Steven J. Pearlman
Show more Show less
Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department and a member of the Whistleblowing & Retaliation and Wage & Hour Practice Groups.

Pinny represents employers in a broad array of matters before federal and state courts, FINRA and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department and a member of the Whistleblowing & Retaliation and Wage & Hour Practice Groups.

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, whistleblowing and retaliation, wage and hour, covenants not to compete, and tort and contract claims.

As an experienced trial lawyer, Pinny has successfully litigated numerous cases from complaint through jury verdict or arbitral award. Notably, Pinny served as trial counsel to King & Spalding LLP in a widely publicized wrongful termination lawsuit brought by a former associate in which the jury returned a complete defense verdict on the seventh day of trial.

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.

Pinny represents employers across a broad range of industries, including financial services, insurance, law firms, media and entertainment, professional sports, and higher education.

In addition to his active practice, Pinny serves as an editor for the Proskauer Whistleblower Defense Blog and Proskauer on Trade Secrets Blog. He is also a regular author of “Expert Analysis” articles for Law360.

While in law school, Pinny served as an editor for the Cardozo Law Review.

Read more about Pinchos Goldberg
Show more Show less
Photo of Shanice Z. Smith-Banks Shanice Z. Smith-Banks

Shanice is an associate in the Labor Department. Shanice is a member of several of the firm’s Practice Groups, including Investigations, Labor Management Relations and Counseling, Training & Pay Equity. Her practice involves assisting clients in litigations, arbitrations, and administrative proceedings surrounding claims…

Shanice is an associate in the Labor Department. Shanice is a member of several of the firm’s Practice Groups, including Investigations, Labor Management Relations and Counseling, Training & Pay Equity. Her practice involves assisting clients in litigations, arbitrations, and administrative proceedings surrounding claims of unlawful discrimination, harassment, and retaliation. She has experience assisting with workplace investigations, pay equity analyses, and counseling clients on a range of employment matters. Relative to her labor relations practice, Shanice assists with representation proceedings, responding to unfair labor practice charges and counseling clients surrounding union organizing efforts and collective bargaining.

Shanice was awarded one of Proskauer’s Golden Gavel Awards in 2023 celebrating excellence in pro bono work. Shanice’s pro bono efforts focus on criminal justice and immigration work. She earned her J.D. from Loyola University New Orleans College of Law, where immediately upon graduation, Shanice argued a case on behalf of the Loyola Criminal Defense Law Clinic in front of the Louisiana Supreme Court.

Read more about Shanice Z. Smith-Banks
Show more Show less
Related Posts
Final-CFTC-Logo-Long
CFTC Awards Over $15 Million to Two Whistleblowers
September 27, 2023
Tips
CFTC Releases 2020 Annual Report on its Whistleblower Program
November 25, 2020
Tips
CFTC Releases FY 2019 Annual Report
December 20, 2019