On March 14, the Commodities Future Trading Commission (CFTC) issued a $1.25 million whistleblower award to an individual who voluntarily provided original information that led to a successful enforcement action.

The whistleblower learned of the misconduct in their role as a compliance/audit official, which usually disqualifies individuals from qualifying for awards. However, the CFTC Whistleblower Program has a rule which allows compliance officials to qualify for awards if they first report the misconduct internally and then wait 120 days before contacting the Commission.

“The whistleblower first reported internally, fulfilling job duties and putting the entity on notice of its wrongdoing,” said Director of the Whistleblower Office Brian Young. “The CFTC’s Whistleblower Program rewards employees with compliance and audit responsibilities who first raise violations internally and then contact the CFTC if the employer sits on its hands.”

According to the award order, the whistleblower’s information “was quite significant because it, and it alone, caused the Division of Enforcement (“Division”) to open the investigation underlying the Covered Action and described the conduct that ultimately appeared in the Order.”

However, the CFTC does note that the whistleblower’s assistance “was limited to the information he/she provided in two duplicate TCR submissions to the Commission” and that “Division staff did not have any contact with Claimant or receive additional information from Claimant in connection with the Covered Action.”

“Insiders have some of the most valuable evidence about illegal activity in our markets,” said Ian McGinley, Director of the Division of Enforcement. “Today’s award recognizes the risks they take in coming forward to the CFTC, as well as the role of their information in amplifying the CFTC’s enforcement efforts.”

Through the CFTC Whistleblower Program, eligible whistleblowers are entitled to monetary awards of 10-30% of the sanctions collected in the enforcement action connected to their disclosure. In the past decade, the CFTC has awarded more than $365 million to whistleblowers and whistleblower tips have resulted in monetary sanctions totaling nearly $3.2 billion.

Geoff Schweller also contributed to this article.