WHAT LEGAL PROTECTIONS ARE PROVIDED TO CFTC WHISTLEBLOWERS?

Exposing unlawful conduct by a business often creates significant monetary exposure for that company and any individual employees engaged in wrongdoing. While the U.S. Commodity Futures Trading Commission is focused on preserving the confidentiality of whistleblowers’ identities, individuals who step forward to report securities fraud may still face retaliation for their decision to do so. Indeed, companies may take adverse actions against employees who they know to be whistleblowers—because they reported internally—or who they suspect to have gone to the Government.

Fortunately, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended the Commodity Exchange Act (CEA) to specifically prohibit this kind of retaliatory activity and provide for compensation for those who are subjected to it. Employers are barred from discharging, demoting, suspending, harassing, threatening, or otherwise discriminating against whistleblowers for reporting fraud to the CFTC. Employees who suffer such discrimination are afforded a private right of action through which they may seek reinstatement, back pay with interest, attorneys’ fees and costs, and compensatory damages for reputational and emotional harm. The anti-retaliation protections are enforced by individuals bringing such lawsuits or through enforcement actions filed by the CFTC.

The retaliation damages made available by the Dodd-Frank Act, through amendment of the CEA, supplement the potential for substantial rewards offered under the CFTC Whistleblower Program. The prospect of receiving a whistleblower reward is a critical incentive to potential whistleblowers, who risk their careers to report fraud. And the protections afforded by these anti-retaliation provisions provide individuals with additional comfort and security in bringing such fraud to light. It is crucial that we make whistleblowers whole and assure that they are compensated for their courage in reporting misdoing. Without the information and insights they provide, many schemes would go undetected.

If you are considering filing a CFTC whistleblower complaint, please fill out our online form or contact us by phone at (267) 551-5240 or via e-mail at zarbitman@feldmanshepherd.com for a free, confidential consultation.