08 August 2018 at 16:14 BST

US derivatives regulator shells out $45 million to whistleblowers

Top US financial regulator has award whistleblowers over $45 million for helping the watchdog identify improper activity.


The Commodity Futures Trading Commission (CFTC) announced the high payouts, a dramatic increase from smaller awards granted in prior years, are evidence the regulator is increasingly receiving tips to help hunt down wrongdoing.

Transformative year

James McDonald, director of the agency’s enforcement division, explained the past year had been “transformative” for its whistleblower program, and he expected more to come. He said, ‘whistleblowers have added significant value to our enforcement program by enabling the commission to swiftly identify misconduct and hold wrongdoers accountable. I expect this trend to continue as the Commission continues to receive increasing numbers of high-quality whistleblower tips.’ The regulator did not identify how many whistleblowers received the award, or what activity the tips helped the regulators hunt down, though under the program whistleblowers can receive between 10 and 30 percent of any monetary sanctions coming from from their tips. Prior to 2018, the CFTC had issued just four whistleblower awards totaling less than $11 million, according to agency figures, while last month the agency had granted three more totaling over $75 million. In July alone, the CFTC announced awarded $30 million to a single whistleblower, its largest single award since the program was authorized in 2010. The regulator also said in July it had granted an award to a whistleblower living in a foreign country for the first time in a separate case.

Aggressive pursuit

The derivatives regulator’s aggressive courting of whistleblowers comes as its fellow markets regulator, the Securities and Exchange Commission, is looking to place new limits on its program. In June, the SEC proposed changes to its whistleblower program that would give it more flexibility in determining the size of awards. SEC Chairman Jay Clayton said its whistleblower program has been a success, but the agency would be better served being able to increase payouts for smaller cases, and limiting the payments for massive settlements.


Also read...

MoFo trio head to Latham in Tokyo switch

Japan M&A growth spurs trio to move firms as Latham grabs MoFo team.