The Commodity Futures Trading Commission (CFTC) on Thursday approved final regulations regarding whistleblower incentives and protection, including provisions to pay individuals who provide the Commission with information about Commodity Exchange Act violations as much as 30% of monetary sanctions subsequently collected.
The whistleblower rules, which were recommended by CFTC staff, were mandated by the sweeping Dodd-Frank Wall Street Reform Act, according to CFTC Director of Enforcement David Meister.
“These rules will advance the Division of Enforcement’s ability to bring successful enforcement actions and will advance the commission’s mission to protect market participants and the public, and promote the integrity of the markets we oversee,” Meister said.
The rules, which the CFTC approved by a 4-1 vote, would allow the Commission to award whistleblowers 10-30% of the monetary sanctions collected in either a CFTC-covered judicial action, administrative action or related action. Actions covered by the regulations include only those resulting in successful resolution resulting in monetary sanctions exceeding $1 million, and the Commission would exercise discretion in granting awards based on several criteria, including the significance of the information provided by whistleblowers.
Employees of certain government, law enforcement and regulatory agencies, and persons convicted of criminal violations related to the action about which they provide information would not be eligible for an award, Meister said.
The CFTC and the Securities and Exchange Commission in 2009 recommended that Congress enact legislation to encourage whistleblowers to come forward with information on misconduct in the futures and securities markets (see Daily GPI, Oct. 19, 2009).
The final regulations become effective 60 days after publication in the Federal Register.
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