CFTC Announces Final Whistleblower Rules, Rejects “Mandatory Internal Reporting” by Whistleblowers

The final whistleblower rules of the Commodities Futures Trading Commission (CFTC) are being announced now at a CFTC open meeting. Like the SEC, the CFTC has rejected any provision that whistleblowers be required first to report internally the violations in question, but will treat internal reporting as a “positive” consideration in its awards.

The alternative pushed by business would have required all CFTC whistleblowers first to risk career suicide by reporting the boss’s wrongdoing to the boss himself.

Industry’s approach would have made the Commission the laughing stock of law enforcement, since no rational person with a career and a mortgage would risk reporting even major fraud with that requirement.

Fortunately, the CFTC put first its responsibility to protect the public, and is taking seriously its law enforcement duties by seeking to root out major frauds.

Madoff, Stanford, and the other major frauds of the past decade prove that internal compliance programs cannot protect the public. That is why Congress in Dodd-Frank demanded the first meaningful SEC and CFTC whistleblower programs.

We applaud the CFTC on this important stand, and look forward to reviewing the text of the final rules when made available.

Based on our firm’s experience in representing whistleblowers, the Senate Banking Committee staff contacted our firm for input on how the new SEC and CFTC whistleblower provisions of the July 2010 Dodd-Frank Financial Reform Act should work. We urged that the Senate strengthen the weak House version of the bill, which provided no meaningful rewards to whistleblowers, in favor of an enforceable right for SEC and CFTC whistleblowers to a significant reward.

Fortunately, that approach is now the law under Dodd-Frank.

We also met with each SEC Commissioner and representatives of the CFTC to recommend strong whistleblower rules to promote the purposes of Dodd-Frank.

We are currently working on select Dodd-Frank whistleblower matters involving SEC whistleblowers and CFTC whistleblowers, as well as our False Claims Act and IRS whistleblower cases. Those cases include a growing area of enforcement, bribery of foreign government officials and other violations of the Foreign Corrupt Practices Act (FCPA).

For a free consultation about a whistleblower case, please call us at 800-228-9159, or click here to contact us by email.

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