Reporting Commodities Fraud to the U.S. Under the CFTC Whistleblower Program

Introduction: Policing Global Markets Beyond Stocks

While the stock market often grabs the headlines, a vast and complex world of derivatives, commodities, and futures underpins the global economy. From the price of oil and agricultural products to complex financial instruments, these markets are crucial. When fraud occurs here, it can have devastating ripple effects.

Recognizing this, the U.S. established the Commodity Futures Trading Commission (CFTC) Whistleblower Program under the Dodd-Frank Act. This program is a critical tool with global reach, inviting and empowering individuals from any country to report misconduct in the U.S. derivatives and commodities markets. You do not need to be a U.S. citizen or resident to be a whistleblower. If you have knowledge of market manipulation, fraud, or corruption in these specific financial arenas, this guide will show you how to report it safely, confidentially, and for a substantial financial reward.

Financial Awards: Rewarding Your Courage

The CFTC program offers significant financial incentives to individuals who expose wrongdoing. This recognizes the professional and personal risks involved in coming forward.

If you voluntarily provide original information about violations of the Commodity Exchange Act that leads to a successful enforcement action with over $1 million in sanctions, you are entitled to a reward.

• Award Amount: The award is between 10% and 30% of the monetary sanctions collected.
• Source of Funds: Awards are paid from the CFTC’s Customer Protection Fund, which is financed entirely through penalties paid by the lawbreakers. No money is taken from harmed customers or investors to pay whistleblower awards.
• Proven Track Record: Since 2014, the CFTC has awarded over $380 million to whistleblowers, whose information has enabled the agency to collect over $3.2 billion in sanctions.

Your Shield: Anonymity and Anti-Retaliation Protections

For international whistleblowers, confidentiality is paramount. The CFTC program provides powerful legal protections to shield your identity and career.

Reporting Anonymously

This is the most vital protection for anyone reporting from abroad. The CFTC program allows you to submit a tip and pursue a claim completely anonymously. To secure this protection, you must be represented by a U.S.-based attorney.

Here’s how the process works:

1. You Retain a U.S. Attorney: Your lawyer serves as your confidential intermediary with the CFTC.
2. Anonymous Filing: Your attorney will submit the official tip (Form TCR) on your behalf, without revealing your name or any identifying details.
3. Shielded Communications: All communication with the CFTC throughout the investigation is handled by your attorney, ensuring your identity remains protected.
4. Confidential Award Claim: If your tip leads to a successful action, your award can also be processed through your attorney to maintain your confidentiality.

Protection Against Retaliation

The Dodd-Frank Act also provides robust anti-retaliation protections. It is illegal for an employer to fire, demote, suspend, threaten, or harass you for providing information to the CFTC. If an employer does retaliate, the whistleblower is entitled to significant remedies, including job reinstatement, back pay, and compensation for legal costs. An action for retaliation must be filed within two years of the retaliatory act.

What to Report: Violations in the Derivatives and Commodities Markets

The CFTC has jurisdiction over a wide range of misconduct related to futures, options, swaps, and other derivative products. This includes fraud and manipulation involving virtual currencies like Bitcoin when they are part of a derivatives contract or are traded in interstate commerce.

Common violations to report include:

• Market Manipulation: Artificially influencing or controlling the price of a commodity (e.g., “spoofing,” which involves placing fake orders to trick other traders).
• Fraudulent Schemes: Ponzi schemes, fraudulent solicitation, or misappropriation of customer funds related to commodities or virtual currencies.
• Trading Violations: Illegal off-exchange transactions, disruptive trading practices, or violations of registration rules.
• Corrupt Practices: Bribery or kickbacks to influence transactions in the commodities markets.
• Cryptocurrency Fraud: Price manipulation, wash trading, or fraud on unregistered trading platforms involving virtual currencies.

How to Report: A Step-by-Step Guide for International Whistleblowers

1. Secure Your Evidence: Carefully and lawfully gather all relevant documents, data, emails, and communications that support your claim. A detailed, chronological narrative is extremely helpful.
2. Hire an Experienced U.S. Attorney: This is the most important step for an international whistleblower. A lawyer specializing in the CFTC program is required for anonymity and will be crucial for building a compelling case, communicating effectively with the agency, and navigating the legal process.
3. File the Official Tip (Form TCR): Your attorney will prepare and submit a detailed “Tip, Complaint, or Referral” (Form TCR) through the CFTC’s online portal. This document outlines the violation and presents your evidence.
4. Cooperate During the Investigation: The CFTC may have questions as it investigates your claims, which can take several years. Your attorney will manage all these communications, protecting your identity.
5. Apply for an Award: Submitting a tip does not automatically qualify you for an award. If the CFTC brings a successful enforcement action based on your information, the agency will post a “Notice of Covered Action.” Your attorney must then file a formal application for your award within a specific deadline.