Whistleblowers with knowledge of misconduct in the commodities market can potentially recover an award through the Commodity Futures Trading Commission whistleblower program. Specifically, if the whistleblower’s efforts result in a recovery of more than $1 million, the whistleblower can receive a substantial portion of the recovery.
The Commodity Futures Trading Commission (CFTC) is a federal agency responsible for regulating the commodities market, which includes many types of futures, swaps, options, and other transactions involving derivatives. To encourage people with knowledge of misconduct in the commodities market to come forward, the CFTC has created a strong whistleblower program under which whistleblowers can receive 10-30 percent of any recovery.
Almost any type of false, deceptive, or illegal misconduct involving commodities can be reported under the CFTC whistleblower program. Some of the most common types of commodities fraud resulting in whistleblower tips are:
- A broker or investment fund manager’s theft of customer funds
- Insider trading of commodities
- Spoofing, which occurs when a trader places an order in a futures market with the intention of cancelling the order before it executes
- Entering fictitious trades of commodities
- A bank’s failure to adhere to record-keeping and reporting requirements for swap data
- Misconduct involving virtual currencies (cryptocurrencies)
A whistleblower who reports a tip to the CFTC whistleblower program that results in a recovery of more than $1 million can receive between 10-30 percent of the recovery. In its brief existence, the CFTC whistleblower program has produced substantial recoveries for whistleblowers. Since 2014, the CFTC has awarded more than $120 million to whistleblowers who provided information about misconduct in the commodities market.
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